The difference between the bid and ask price of a trading instrument at a given time. For example, if EUR/USD is quoted 1.2050 (bid) / 1.2052 (ask), the spread is 2 pips. This is essentially the transaction cost (for “no commission” brokers, the spread is how they earn revenue). Spreads can be fixed or variable. Fixed spreads stay the same (useful for predictability, but can be higher on average) while variable (floating) spreads fluctuate with market conditions – often narrow in liquid times and wider in volatile periods. For any forex robot, the spread directly impacts profitability: scalpers and high-frequency EAs, in particular, need very tight spreads to be viable. If an EA targets 5 pips profit but your spread is 3 pips, that leaves very little margin after costs. Also, wide spreads can hit stop losses or prevent entries – e.g., a news trading EA might get hurt if spreads blow out 20+ pips on data releases. When optimizing a robot, always account for typical spread on the broker and instrument. Many strategy backtests assume a certain spread; if the real spread is higher, results will differ. In summary, spread is a critical broker term: it’s the built-in cost per trade, and selecting a broker with consistently low spreads (and/or using an ECN account with raw spreads + commission) is often crucial for algorithmic trading success.

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