Spread · Day Trading for Beginners

Spread

Let's talk spread - a crucial aspect of day trading that can be pretty hard to grasp and even harder to implement into your trading. Personally I'm just starting feel that I "get" its effects on my strategy but I'm still ways off in regards to the hard numbers.

I actually went back to 100% paper trading after a short spell of live trades where I felt that my inferior grasp of spread effects had a negative effect on profits. I realized that I needed to wrap my head around this for real before comitting real money again. Currently experimenting with how limit orders and stop limits can be used to mitigate the effects of spread, and also with how to adjust my optimal entries/exits with spread as part of the equation.

Of course, the general rule of thumb is that low spreads are the way to go, but things are not always that black and white. A given asset/market could have other parameters that make you want to trade it, but the spread is high enough to make things a lot harder than you wished. Or vice versa, of course - low spread but sub-optimal parameters in other regards.

Would love to hear your opinions and experiences.

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