The spread is the gap between bid and ask. When you buy at the ask and immediately sell at the bid, you realize a loss equal to that gap times position sensitivity—before the market even “moves.”
Small targets magnify friction
Strategies with very tight take-profit levels can be dominated by spread and latency. Model costs explicitly rather than assuming mid-price fills.
Pip value still anchors risk
Even with spread awareness, your stop distance in pips and pip value determines baseline risk sizing.
Use the pip value calculator and profit/loss calculator for planning.
Round-trip thinking for scalps
If your average target is ten pips, a two-pip spread is a fifth of the journey before the market even trends your way. That does not make scalping impossible—it means your edge must live outside the spread or you must trade hours when spread compresses.
Recording spread in your journal
Log quoted spread at entry and exit for a month. You will see which sessions subsidize your strategy and which tax it.
- Tag trades taken five minutes before high-impact prints.
- Separate results for market vs limit entries.
- Compare majors vs crosses on the same style.
Connecting spread to pip value
Pip value tells you dollars per pip; spread tells you pips paid upfront. Together they describe the first hurdle every trade must clear.