Reading the spread as a signal in itself

[Amanhasnoname]

Most traders treat the spread as a cost. Experienced scalpers also treat it as information.

A widening spread often means liquidity providers are stepping back. That happens before news, at session handovers, and when volatility rises. A narrow, stable spread suggests the opposite: plenty of participants and orderly conditions.

Watching the spread live can warn of trouble before the chart does. A jump from 0.6 to 1.5 pips in a normally quiet moment might precede a fast move. It does not say which direction, but it says something is changing.

A practical use is the filter. Do not enter when the spread is more than, say, 1.5 times its typical value for that time of day. That one rule removes a surprising number of bad trades.

The 'typical value' matters. A spread of 1.2 is normal at 21:00 GMT and abnormal at 14:00, so thresholds have to be tied to the time of day.

Is spread used as a filter or a signal, and what thresholds ended up working?