Bid/Ask Spread Analysis - futures io
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Bid/Ask Spread Analysis

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Bid/Ask Spread Analysis

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  #1 (permalink)
Posts: 1 since Mar 2019
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I have learnt that the bid/ask spread is one of the most important variables that new retail traders need to consider.

When I was a newbie trader I started off using 5 pip S/l and 10 pip T/P for a 2:1 risk/reward ratio, (as I suspect many new traders do). I wasn't very successful. So I did a deep analysis of the EURUSD M1 chart with a reliable Zig Zag indicator. I set it to 5 pips as the minimum leg size, which for me signified the kind of retracement I could deal with.

The results seem to suggest that most small swings were around 7 pips and the 10 pip legs were relatively rare in comparison. So, I started using a 10 pip stop loss and left the take profit open, so I could monitor the trade closely and decide when to get out if the trade had already hit a 7 pip loss or profit.

This resulted in an improvement, but still left me short of a profit. It was only then that I noticed the high bid/ask spreads I was trading against with that broker, so of course looked for a better broker.

Now, if you use MT5 you can download a free indicator, "Bid/Ask spread analysis in MetaTrader 5" in MQL5 Articles, which reports the true recent bid/ask values, not just the spread your broker declares it to be. It should be very informative for established as well as new traders.

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  #2 (permalink)
Paris, France
Posts: 3 since Jul 2021
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the spread between the Best Ask and the Best Bid on the big Index are meaningless for me
I'm trying more to analyze the volume traded and (executed) on the Bid or the Ask on the last 3 last bars

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futures io Trading Community Platforms and Indicators > [MetaTrader]    Bid/Ask Spread Analysis

Last Updated on September 13, 2021

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