Every trade interacts with the spread — the small gap between the bid and the ask that quietly changes your true price. Even when charts look stable, the spread decides what you actually pay to enter or exit a position. To understand how these prices form and why the market always runs on two numbers instead of one, start with Bid vs Ask.
Liquidity controls the spread’s behavior. When markets are active and deep, spreads stay tight. When participation thins out, the spread widens fast — sometimes in a single candle. These changes explain slippage, bad fills, and sudden entry costs that catch beginners off guard. For a deeper look at how liquidity shapes spread movement, explore What Is Liquidity?.
Your order type determines how much of the spread you pay. Market orders cross the entire spread instantly, while limit orders wait on one side of it — potentially saving cost, but risking no fill at all. Knowing when to choose speed vs precision is part of building execution skill. For a clear breakdown of how order types interact with the spread, visit Market vs Limit Orders.
Spread behavior is a direct contributor to price movement. When spreads tighten, liquidity is flowing; when they widen, the market is stressed, thin, or shifting direction. These changes often explain why candles jump, stall, or reverse. For a full walkthrough of the mechanics behind these movements, read Basic Concepts of Price Movement.
Once you understand the spread, trading becomes more realistic. Entries feel predictable instead of surprising. Risk is easier to size. And every chart you read makes more sense — because you finally see the cost built into every trade.