Is a smaller spread always better?

Generally yes, because it lowers your entry and exit cost. But you should also consider factors like slippage, commissions, platform quality and regulation. A very tight spread is not useful if execution is poor.

Why do spreads spike around news events?

News increases uncertainty and volatility. Liquidity providers widen spreads and reduce quote sizes to protect themselves from sudden adverse moves, which shows up on your platform as wider spreads and more slippage.

Can different brokers show different spreads for the same pair?

Yes. Brokers use different liquidity providers, markups, account types and risk models, so spreads can vary even on the same instrument. Comparing typical spreads across brokers is part of choosing where to trade.

Does using limit orders avoid paying the spread?

If your limit order is hit (you provide liquidity), you may effectively capture part of the spread instead of paying it, especially on true ECN/market venues. On most retail platforms, however, you should still assume the spread is a key cost.

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DAY TRADING STRATEGIES

News Reaction Trading

Two-panel diagramsExpectations vs outcomeRetest entriesExecution risk control

Panel 1: News reaction trading focuses on the *market’s interpretation*—not just the headline itself.

Panel 2: A common approach is to trade after the market “chooses” a level: enter on a hold/retest with strict invalidation.

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Related Day Trading Strategies

Intraday Breakout-Retest Intraday Mean Reversion Intraday Trend Following Opening Range Breakout Volume-Based Day Trading

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Last updated: March 2026