Spread is the difference between the buying and selling price of a forex pair. For instance, if the EUR/USD pair is quoting 1.2010/1.2013, the spread is 0.0003. Since the best price you can go long on the euro is 1.2013 and the best price you short is 1.2010, the currency pair should move in your favour by a value equal to the spread to breakeven. Higher the spread, bigger is the breakeven point and lower the spread, smaller is your breakeven.

Related Articles