Now that people have a deeper understanding of financial investment (such as financial management or funds), more and more people are beginning to participate in financial investment. Foreign exchange has been one of the most popular investments in the past two years, and it has also attracted widespread attention.
Many novices believe that foreign exchange trading is a complex transaction to learn because there are many indicators and various obscure professional terms in foreign exchange trading, so today, we will discuss differences and slippage.
What is the difference between the two in trading?
The foreign exchange spot difference is the difference between the buying price and the selling price. Each currency pair on the foreign exchange trading platform displays two prices, the buying price, and the selling price, and the difference between them is the spread. To a certain extent, foreign exchange spreads are the handling fees of our foreign exchange transactions, which are directly related to the profitability of our trades.
Slippage refers to the phenomenon that the transaction point is different from the point specified by itself. It is impossible to avoid foreign exchange slippage altogether. There are two main reasons for slippage. One is that the dealer slipped and fell deliberately. The other is that the service cannot keep up with the slippage caused by rapid exchange rate fluctuations.
Although it is said that this difference and slippage may cause losses to traders, there are still some differences between them. The foreign exchange spread is a handling fee, which is collected by the system. Wrong points cause foreign exchange slippage. The fixed space of foreign exchange points is negative, and the slippage of foreign exchange is positive or negative. The difference between foreign exchange points is not compensated, and foreign exchange slippage can compensate.
Spread and slippage can be directly related to the ultimate profitability of our transactions, and the difference between them is easy to distinguish. But in any case, traders must pay special attention to factors that may affect their earnings.