Understanding Forex Spread Requires Knowing The Dual Meaning of the Term Spread

To understand what a Forex spread is you need to understand that in the realm of Forex, there are two totally different things the word spread refers to. For one thing, a spread in any type of commodities market is a trade made where the trader buys one commodity and at the same time sells another. When making this type of trade it is not important if both of these commodities rise or fall in price. The only thing that is important is whether the difference between the two increases or decreases. In this article, we will expound on this meaning of the term and explain the other meaning of the word spread as it applies to the Forex market.