Spread Indicator – FX Replay Guide

While FX Replay does not display live bid/ask spread data, understanding spread mechanics is crucial when analyzing liquidity conditions, trade cost efficiency, and execution timing—especially when replicating real-market trading behavior during backtesting.

Key Concepts to Simulate in FX Replay

Understanding Spread in the Replay Environment

• Real-time spread is not visible, but volatility, session timing, and liquidity conditions can imply spread behavior.
• For example:
  • London/NY open = tighter spreads
  • Off-hours (Asia close) = wider spreads

Trade Timing Logic

• Use spread awareness to filter entries:
  • Avoid executing trades immediately after volatile news candles (implied wide spread)
  • Prefer entries during consolidation or high-volume session overlaps (implied narrow spread)

Profitability Estimation

• When journaling trades, deduct 0.5–2 pips from gross profit to simulate spread cost.
• Especially relevant for:
  • Scalping strategies
  • Tight risk-reward setups

Backtesting Spread-Based Conditions

• Tag setups like:
  • “Breakout during high-volume session = probable narrow spread”
  • “Reversal at low liquidity time = assume higher spread”
• Use tags to evaluate if spread conditions impacted trade outcomes.

Combine with Session Indicators

• Use tools like:
  • Zeussy Time Cycles
  • NY AM/PM blocks
  • Asia/London sessions
• Combine with volume spikes to identify moments where spreads likely tightened

Pro Tip

In FX Replay, simulate spread awareness by:

• Factoring spread cost into all trade entries/exits
• Avoiding entries during illiquid or transitional zones (e.g., end of NY session)
• Reframing RR logic to account for “invisible” spread slippage
• Use this as a discipline tool to time trades with real-world execution in mind—even when the platform doesn’t render the bid/ask line directly