What is spread?

What it means

Every position starts underwater by the spread. Buy at the ask, and you can only sell at the bid, so the trade must move by the spread before it breaks even. This is why spread matters far more to short-target strategies than to long-horizon ones: the same cost is a rounding error on a 200-point target and a third of the edge on a 30-point one.

Why it matters

On XAUUSD the spread varies enormously by account type and by time of day. Raw and ECN accounts often quote gold in the $0.10 to $0.40 range with a separate commission, while standard accounts fold a much wider spread in and charge nothing extra. Neither is automatically cheaper — the spread cost calculator compares them properly.

What this changes in practice

Spread also widens on schedule: at the daily rollover, at session opens, and around high-impact news. An automated system that does not check spread before entering will take its worst trades at exactly these moments. Our engine refuses to open a gold position when the spread exceeds $1.00. Measured over a year of bars on our own broker that threshold was reached in 3 of 70,546, so on this feed it is insurance rather than a daily filter.