Forex Spread Calculator

What Is a Forex Spread?

The spread is the difference between the bid (sell) price and ask (buy) price of a currency pair.

Types of Spreads:

• Fixed Spreads – Constant (common with market makers)
• Variable Spreads – Fluctuates with liquidity (ECN/STP brokers)

Example:

• EUR/USD Bid: 1.0800
• EUR/USD Ask: 1.0802
• Spread = 0.0002 (2 pips)

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Why Use a Forex Spread Calculator?

1. Measures True Trade Costs

• Converts pips into dollar amounts per lot size.

2. Compares Brokers Effectively

• Identifies which broker offers the lowest spreads.

3. Optimizes Trade Timing

• Avoid trading during high-spread periods (e.g., news events).

4. Improves Scalping & Day Trading

• Even 1 pip saved per trade adds up over time.

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How to Calculate Spread Costs (Manual Formula)

Formula:

Spread Cost=Spread (in pips)×Pip Value×Lot SizeSpread Cost=Spread (in pips)×Pip Value×Lot Size

Example (1 Standard Lot EUR/USD):

• Spread: 2 pips
• Pip Value: $10 (for 1 standard lot)
• Cost = 2 pips × $10 = $20 per trade

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How to Reduce Spread Costs: 5 Pro Tips

1. Trade During Peak Liquidity (London/NY overlap = tightest spreads).
2. Avoid High-Spread Pairs (Exotics like USD/TRY cost more than EUR/USD).
3. Use ECN/RAW Accounts (Lower spreads + commission vs. standard accounts).
4. Trade Larger Timeframes (Fewer trades = fewer spread payments).
5. Hedge with Limit Orders (Avoid paying spread on both entry/exit).

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FAQs About Forex Spreads

1. What’s a good spread for Forex?

• Major pairs: 0.1–1.5 pips (ECN) or 1–3 pips (standard).
• Minor pairs: 2–5 pips.

2. Do swaps affect spread costs?

No—swaps are overnight fees, while spreads are instant trade costs.

3. Which broker has the lowest spreads?

IC Markets, Pepperstone, & FP Markets often offer <0.1 pip on EUR/USD.

4. Are zero-spread brokers trustworthy?

Some are, but they usually charge higher commissions instead.

5. Can scalpers survive with high spreads?

No! Scalpers need <1 pip spreads to remain profitable.