Cant believe after so many years trading I still don't get this straight. Can someone please help to clarify the Bid and Ask price in the following scenario
- At 1 o'clock, the Bid for EU is 1.2000 and the Ask is: 1.2500. A long position is made at 1.2500. The spread sent to the broker is 500pips.
- At 10 o'clock, the Bid price for EU is 1.3000 the Ask is: 1.3500. If the long position is now closed, is it the Ask or the Bid used to calculate the profits?
If Bid is used, then profits is ony 1.3000 - 1.2500 = 500pips; compared to 1000 pips if Ask price is used.
Hence the total spread sent to broker for this trade is 500pips at open + 500pips at close = 1000pips??? Mean I had to pay 2 times the spread for one order?
Thanks alot.
back... and more dangerous.