Question 1

What is spread in GBP/USD forex trading?

Accepted Answer

Spread in GBP/USD is the difference between the bid (sell) and ask (buy) price quoted by your broker. It represents the transaction cost for each trade. For example, if GBP/USD bid is 1.1000 and ask is 1.1002, the spread is 2 pips. You effectively start each trade 2 pips in the negative. Spreads vary by broker, time of day, and market conditions.

Question 2

How do I calculate spread cost for GBP/USD?

Accepted Answer

Spread cost for GBP/USD is calculated as: Spread (in pips) × Pip Value × Lot Size. With a 2-pip spread and standard lot where 1 pip = $10, the spread cost is 2 × $10 × 1 = $20 per trade. For a mini lot it would be $2, for a micro lot $0.20. Our calculator computes this instantly for any lot size.

Question 3

Why are spreads important for GBP/USD scalping strategies?

Accepted Answer

Spreads are critical for scalping because small profit targets mean spread takes a larger percentage of gains. If you target 10 pips and spread is 2 pips, you are paying 20% of your profit as transaction cost. For GBP/USD scalping to be profitable, you need consistently tight spreads (1-2 pips), preferably with a raw spread account plus commission rather than markup.

Question 4

What time has the tightest spreads for GBP/USD?

Accepted Answer

The tightest spreads for GBP/USD typically occur during the London/New York session overlap (8 AM - 12 PM EST) when liquidity is highest. Spreads widen during the Asian session and around major news events. Weekend gaps can also cause spread spikes. For best execution on GBP/USD, trade during peak hours and avoid major economic announcements unless specifically trading news.

GBP/USD Spread Cost Calculator

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