Trading Commissions or Spread??

When you are new to the world of trading, traders will often hear a number of terms that will often be used as they carry out day-to-day transactions. Of course traders must understand the language in a field they are involved in because this understanding will make trader's life easier.

Many traders, especially novice traders, are still confused about choosing commissions or spreads. In fact, many people don't understand the difference between spread and commission. This article will assist traders in exploring the differences between commissions and spreads.

Spreads

In simple terms, the spread is the value of the difference or margin between the buying price (ask) and the selling price (bid) of a currency between a trader and a broker. This fee is charged by the broker to the trader for the transactions that the trader makes, not charged separately.

This is where the broker gets profit. When a trader uses the services of a broker to make a profit, there must be a fee or commission that the trader will have to bear. Don't be easily tempted by brokers who provide commission-free services, because it is very likely that the costs that traders charge are in the spread.

Commission

Commission is a fee charged by the broker during the investor trading process, which is one of the investment costs. In general, the commission charged by the broker depends on the size of the order.

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