Why the Bid-Ask Spread Matters

The bid-ask spread is a small detail with a real impact on trading.

The bid is the highest displayed price a buyer is currently willing to pay, while the ask is the lowest displayed price a seller is currently willing to accept.

The difference between them is the bid-ask spread.

In liquid futures markets, the spread may often be narrow, but it can change with volatility, available liquidity, and market conditions.

A wider spread can increase the cost of entering and exiting a trade.

When reviewing a strategy, I don't want to focus only on the chart's theoretical entry and exit prices.

I also want to understand the actual execution conditions and costs that affect the result.