What is the meaning of point spread in foreign exchange? What is the difference between point spread and sliding point?
Foreign exchange "spread" refers to the spread between the buying price and selling price of a currency pair. In the quotation of foreign exchange pairs, the buying price is usually on the left and the selling price is on the right.
Generally, the point difference is determined by the platform itself, and the point difference of different platforms is different, which can be divided into fixed point difference and floating point difference. Investors had better choose a fixed spread, so the transaction cost is more controllable. The smaller the difference, the better. Because the smaller the difference, the less the service charge. At present, the main currency spreads of most formal platforms are about 2-3 points. Suggestions: when choosing foreign exchange trading platforms (brokers), we should comprehensively consider compliance, security, stability, trading speed and spread.
What is point difference?
In foreign exchange trading, there are two quotations for trading products, one is the buying price and the other is the selling price. The two prices fluctuate in real time. The difference between the two is the spread, which is the transaction cost of each order. Point difference is divided into floating point difference and fixed point difference.
What is sliding point?
Sliding point refers to the traders in the single, single price and the final transaction price is not consistent, there is a point drop. There are two main reasons for sliding point: one is caused by network fluctuation or server delay. One is due to excessive market fluctuations. Therefore, any platform can not completely avoid the sliding point. Of course, some black platforms will have malicious sliding points. Related reading: what does the sliding point of foreign exchange mean
What is the difference between sliding point and point difference?
Point spread is the normal fee charged by foreign exchange dealers, while sliding point is the extra fee that traders need to pay due to network, server and other force majeure factors.
What if there is a slip point?
If a trader encounters a slip point in the process of trading, the first thing to do is to analyze the reasons. If it is a slip point under normal circumstances, if the number of points is small, it will not have much impact. If the slip point is more serious, it is necessary to reflect the situation to the trading platform. It is best to save the slip point order section in the trading record.
Finally, it is suggested that traders choose the formal foreign exchange trading platform to trade, so as to minimize the slip point.
Generally speaking, for currencies with high liquidity, the lower the spread to other currencies, for example, the spread of euro / dollar and pound / dollar is lower than that of other non major currencies.
[disclaimer] the publication of this article by finance managers for the purpose of transmitting more information does not mean that they agree with their views or confirm their descriptions. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk