When the market closes, or during high news events; spreads can widen significantly. This is especially true for the 1 hour between the New York close and Asian open and is caused by very low liquidity. Low liquidity occurs when people are not trading (such as during high news or whilst the banks and hedge funds are closed). The situation is completely normal when trading the real market.
You can take the following steps during this time:
1. Avoid trading altogether between 5pm and 6pm EST and in high news events.
2. Temporarily move/widen your stop loss/ take profit whilst spreads are wider.
3. Monitor your charts closely during this time.
When you open or close any trade, someone else always has to be on the other side of that trade. Fair Forex is an A Book, True ECN broker, this means that our liquidity is like an Ocean and that the person taking the other side of your trade is like another fish in the ocean. This is opposed to B Book brokers who take the other side of your trade and trade against you.
The number of fish in the Ocean will determine the demand, the pricing and the spreads. So when the markets close and all the big fish (banks and hedge funds) have gone home for an hour to take a break, there are less fish in the Ocean, meaning less demand and higher spreads.
Wider spreads at market close is a sure sign that you are trading the real market and not on the brokers platform which is subject to various types of broker manipulation.