Why low spread brokers are important in forex trading

[geraldinemarsh]

Forex forums are an excellent resource to learn from other traders, and this forum is one from where I have taken important lessons in the past. And now I want to share my 2 bits on what I consider to be one of the most important factors in trading - spreads - which is one of the most crucial factors when it comes to determining the cost of trading.

What factors drive the forex spreads?

1. The market witnesses periods of high volatility during big economic events, which causes spreads to widen.
2. Liquidity dries up when the number of participants becomes lesser.Therefore, forex brokers have to increase their trading spreads to account for the risk of loss.

Why do you need a tight spread forex broker?

1. Lower trading costs: The tighter the spreads, the more profit you can save on a trade and the wider it is, it can be more difficult to make a profit.
2. Efficient for day traders: Finding the best broker who offers tight spreads is particularly important for scalpers and day traders because they make a large number of trades and have to pay the costs irrespective of the outcome.

List of low spread brokers who offers best forex spreads:

1. TurnkeyForex:

• Average spread: 0.2pips
• Commissions: $1/lot
• Maximum leverage: 500:1
• Minimum deposit: $10
• Trading platforms: MetaTrader4, MetaTrader5, ActTrader

2. EagleFx:

• Average spread: 0.7 pips
• Commissions: $6/ lot
• Maximum leverage: 500:1
• Minimum deposit: $10
• Trading platforms: MetaTrader4

3. Tickmill:

• Average spread: 0.2pips
• Commissions: $2 per side
• Maximum leverage: 500:1
• Minimum deposit: $100
• Trading platforms: MetaTrader4, MetaTrader5

4. Alpari

• Average spread: 0.4pips
• Commissions: $1.5/lot
• Maximum leverage: 1000:1
• Minimum deposit: No minimum deposit
• Trading platforms: MetaTrader4, MetaTrader5

5. Axitrader

• Average spread: 0.5pips
• Commissions: $3/lot
• Maximum leverage: 500:1
• Minimum deposit: $100
• Trading platforms: MetaTrader4

As forex spreads are the primary costs of trading currencies, it is very important for traders to keep an eye on the important events that cause spreads to fluctuate. This is one effective way to maximize profits. What do you all think?

 

[Mercor]

Lower spreads translate to lower overall trading costs and it is especially very important for scalpers who dip in and out of positions continuously to make small profits. If spreads are higher, traders are only left with a small portion to take home and sometimes not even that if the number of losing trades is more than the winning trades.

 

[WalletInvestor]

What combination of spreads and fees/commissions is right for you somewhat depends on your strategy. If you are a scalper or otherwise trade on shorter timeframes, prioritizing lower spreads is a good idea.

 

[louisegoodman]

Good info! Coinexx is another broker you can consider adding here, spreads start from 0.1 pips.

 

[PintoFire]

Thank you for making the effort to research and compile this list. I was already on the hunt for a good low spread broker and I think I've got a lot of options now.

 

[geraldinemarsh]

Good info! Coinexx is another broker you can consider adding here, spreads start from 0.1 pips.

Could you give more details of the broker.

 

[smithanderson]

To make more profits, you don't only need a high winning rate but lower trading costs are also equally important so that you can save enough.

 

[diabolique]

Spreads are dependent on the market liquidity. When the liquidity is higher the spreads are tighter which is why I always avoid trading during volatile periods. New york and london sessions are most favourable if you want lower spreads.

 

[Polakandil]

Usually when looking new broker, spread also included one consideration, besides regulation, tight spread, and ultra-fast execution will be more preferred when choosing the broker, and if the trader already found a good broker with good trading conditions, usually will keep working with them.

 

[Didymous]

This is a great list of low spread brokers. Lowest spread forex broker is the best broker for day trading. The spreads in forex trading are influenced by a variety of factors in which two important aspects are: liquidity and volatility. It is generally seen that the spreads widens during the release of high impact news or at the close of the market and tightens when the trading volume is high. When you look for low spread forex brokers, check the average spread for a particular currency pair. You can also compare different tight spread forex brokers to know which is offering the lowest spread. Spreads between 0.1 to 1 pips for major pairs are considered as low.

 

[Polakandil]

The low spread broker not only gives an advantage for scalping or intraday trader, but all trading styles get an advantage from low spread broker, it is also depending on the trading pair that chose for trading, the cross pair usually has a higher trading spread compared to major trading pair, meanwhile, exotic pair has larger spread and dangerous trading could happen when choosing exotic pair high spread.

 

[louisegoodman]

Could you give more details of the broker.

Sure, they offer leverage upto 500:1 on forex majors, and charge a commission of $2/$100k rt. Been using them for over a year now, never had any major issues.

 

[Paulsy]

Forex forums are an excellent resource to learn from other traders, and this forum is one from where I have taken important lessons in the past. And now I want to share my 2 bits on what I consider to be one of the most important factors in trading - spreads - which is one of the most crucial factors when it comes to determining the cost of trading.

What factors drive the forex spreads?

1. The market witnesses periods of high volatility during big economic events, which causes spreads to widen.
2. Liquidity dries up when the number of participants becomes lesser.Therefore, forex brokers have to increase their trading spreads to account for the risk of loss.

Why do you need a tight spread forex broker?

1. Lower trading costs: The tighter the spreads, the more profit you can save on a trade and the wider it is, it can be more difficult to make a profit.
2. Efficient for day traders: Finding the best broker who offers tight spreads is particularly important for scalpers and day traders because they make a large number of trades and have to pay the costs irrespective of the outcome.

List of low spread brokers who offers best forex spreads:

1. TurnkeyForex:

• Average spread: 0.2pips
• Commissions: $1/lot
• Maximum leverage: 500:1
• Minimum deposit: $10
• Trading platforms: MetaTrader4, MetaTrader5, ActTrader

2. EagleFx:

• Average spread: 0.7 pips
• Commissions: $6/ lot
• Maximum leverage: 500:1
• Minimum deposit: $10
• Trading platforms: MetaTrader4

3. Tickmill:

• Average spread: 0.2pips
• Commissions: $2 per side
• Maximum leverage: 500:1
• Minimum deposit: $100
• Trading platforms: MetaTrader4, MetaTrader5

4. Alpari

• Average spread: 0.4pips
• Commissions: $1.5/lot
• Maximum leverage: 1000:1
• Minimum deposit: No minimum deposit
• Trading platforms: MetaTrader4, MetaTrader5

5. Axitrader

• Average spread: 0.5pips
• Commissions: $3/lot
• Maximum leverage: 500:1
• Minimum deposit: $100
• Trading platforms: MetaTrader4

As forex spreads are the primary costs of trading currencies, it is very important for traders to keep an eye on the important events that cause spreads to fluctuate. This is one effective way to maximize profits. What do you all think?

It is crucial to choose low spread forex brokers in forex trading to minimize losses, and it is also helpful to open and close multiple positions per trading session when choosing low spread forex brokers. Unfortunately, such low spreads sometimes require high-deposit accounts. Brokers like AximTrade provide the best spreads in the market varying from 0 to 3 pip on all major currencies. I would say it would be best to get pretty low spreads with a Forex Standard Account or CENT account. Happy Trading

 

[geraldinemarsh]

Spreads are dependent on the market liquidity. When the liquidity is higher the spreads are tighter which is why I always avoid trading during volatile periods. New york and london sessions are most favourable if you want lower spreads.

I also avoid the currencies that are traded thinly and prefer major pairs most of the time. Since there are many buyers and sellers in the market for these pairs, brokers are able to maintain tight spreads.

 

[geraldinemarsh]

This is a great list of low spread brokers. Lowest spread forex broker is the best broker for day trading. The spreads in forex trading are influenced by a variety of factors in which two important aspects are: liquidity and volatility. It is generally seen that the spreads widens during the release of high impact news or at the close of the market and tightens when the trading volume is high. When you look for low spread forex brokers, check the average spread for a particular currency pair. You can also compare different tight spread forex brokers to know which is offering the lowest spread. Spreads between 0.1 to 1 pips for major pairs are considered as low.

These are really good points that you've shared. All the brokers in the list have an average spread in the range of 0.2 pips- 1 pips.

 

[geraldinemarsh]

The low spread broker not only gives an advantage for scalping or intraday trader, but all trading styles get an advantage from low spread broker, it is also depending on the trading pair that chose for trading, the cross pair usually has a higher trading spread compared to major trading pair, meanwhile, exotic pair has larger spread and dangerous trading could happen when choosing exotic pair high spread.

Right, low costs are something that’s favoured by everyone irrespective of their strategy.

 

[Polakandil]

I also avoid the currencies that are traded thinly and prefer major pairs most of the time. Since there are many buyers and sellers in the market for these pairs, brokers are able to maintain tight spreads.

Major pair is a currency that is the most traded among traders, high liquidity and low spread, for short term scalping trader, in daily trading possible they trade very active make hundred transaction a day, small target many times trades.

 

[geraldinemarsh]

Major pair is a currency that is the most traded among traders, high liquidity and low spread, for short term scalping trader, in daily trading possible they trade very active make hundred transaction a day, small target many times trades.

Definitely! trading major pairs are extremely profitable for traders because of high liquidity and lower spreads.