Is it just me, or are you also picky when it comes to spreads?
I’ll be honest, I don’t like giving away “free pips” to the market. It’s one thing to lose on a bad setup, but it’s another to bleed money on costs you can control. The spread might look tiny on the screen, but over weeks and months it’s one of the biggest silent killers of performance.
Here’s what you need to know about why spreads matter more than most traders think:
1. The Math Doesn’t Lie
Take EUR/USD with a 0.5 pip spread. On a standard lot, that’s $5 per trade. Now imagine trading the same pair at a 2.0 pip spread, that’s $20 per trade. Make 100 trades in a month, and you’ve just paid $2,000 in spread versus $500. That’s $1,500 gone, not because of bad analysis, but because of cost.
The bid–ask spread is the direct cost of entering and exiting a trade, and wider spreads make it harder to break even, especially in volatile or thin markets. (source:Investopedia)
2. Wide Spreads Force You to Work Harder
Every extra pip means you need a bigger move just to break even. A 10-pip scalp isn’t really 10 pips if the spread takes two off the top. Suddenly, your strategy needs higher accuracy just to keep the same profit level. It’s like running with a weight vest you didn’t choose.
3. The Impact is Worst on Smaller Accounts
For retail traders running modest accounts, spread costs hit harder. You’re not just paying more per trade, you’re shrinking your ability to scale. Wide spreads quietly lower your effective risk-to-reward, making it feel like you’re always one step behind.
4. Why Liquidity Matters
This is why majors like EUR/USD, USD/JPY, and GBP/USD dominate. They’re not just liquid, they’re cheaper to trade. Exotic pairs may look exciting, but when the spread is 30–50 pips wide, your edge is gone before you even click. It reminds us traders that “spreads are how brokers earn on no-commission accounts,” so ignoring them is like ignoring a permanent fee. (source:babypips)
My Takeaway
Spreads are the hidden tax of trading. Ignore them, and you bleed edge every single trade. Respect them, and you immediately put yourself ahead of most retail traders. Tight spreads aren’t about saving pennies, they’re about protecting your strategy’s foundation.
In this game, every pip counts, especially the ones you don’t see.