Did you notice that you bought currency for $5 and then immediately after the purchase it dropped to $4.60? What happened? And why, despite using a free currency transfer instead of instant trading, which has a commission.
The first thing that happened to you is normal, and many people face this when buying cryptocurrencies right after making a deposit.
Reason
The difference between the purchase price and the market price (Spread)
Even if the platform says there are no commissions, often the commission is hidden in the price difference.
Example: you buy currency for $5, but if you try to sell it immediately, you find that its actual market value is $4.60. This difference is the platform's profit and is called the spread.
Liquidity and price fluctuations
Some currencies have low trading volume or their price fluctuates rapidly. Therefore, you may buy at a certain price, and a few seconds later the price drops, making it seem like you are losing.
Product type (instant trading vs transfer)
- In instant trading, you pay a clear and small commission (for example, 0.1%), but the price is very close to the market price.
