Why You Need a Low Spread Forex Trading Platform

[ali200]

Invariably, you will earn money from forex trading by having an effective trading plan. But the things you can do to maximize profits do not end there. A low spread trading platform also helps. In fact, it helps a lot.

Now when you trade through a broker, he will not ask you directly for a fee. He get's his money from forex spreads. It works this way. When you buy a currency pair the broker charges a spread on the transaction. You know about spreads. It's the difference between the bid price and ask price. The bid price is what you pay for the currency and the ask price is what you sell the currency for. The difference is expressed in pips. This means that if a broker adds two pips to the bid price, you are paying him for the price of two pips. If you sell the currency right after you bought it, you will find yourself down two pips down. The more pips or spreads he adds to the bid price the more costly the trade becomes. This lessens the profitability of the trade and the bigger the risks. Meanwhile, the broker always earns no matter what happens to your trade. You have paid for his services in advance.

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[ayuxxx]

all trader will look for low spread because they want to improve their gain in short time..

[fxapex]

low spreads increase your profit margins, thats why low spreads are important....

[Gaban]

yes, indeed very low spreads menguntungkn for our trading. With low spreads, we can get more profit. try to trade in instaforex. Here, we can trading without spread.

[Gunner Jensen]

I don’t think we need any solid reason to ask for low spread, as it is obvious that no one wants to pay high fees, therefore having a reliable broker with low spread is so wanting. I trade with OctaFX which is a completely reliable broker and have fabulous conditions including one of the lowest spread of just 0.2 pips for all major pairs with also giving us 50% bonus on any deposit we make, so it is so easy for scalping or short term trades.

[gacha]

Naturally, the lower the spreads, the better it is for trading result, especially with scalping trading strategies. traders should had a proper understanding, how spread affect our trading result. for example i had monthly total order at average150 transaction on EURUSD, at first i use non ecn broker service, 2 pips spread on eurusd which means, 150 x 2 pips, 300 pips monthly cost in total, but now my result getting better as I moved into armada market, an ECN brokerage service with 0.3 spread charged on eurusd, spread cost are 0.7 pips x 150 trades equal to 105 pips monthly cost. have anyone ever consider how spread cost your trade. and yess indeed ecn brokers cost cheaper, now i have 195 pips additional profit. before start and pick up your desired trading style, better consider how much it cost, what benefit and what the risk. scalping are commonly an overtrade system, which means spread does matter with this trading system. all the best for you all

[uncle gober]

Naturally, the lower the spreads, the better it is for trading result, especially with scalping trading strategies. traders should had a proper understanding, how spread affect our trading result. for example i had monthly total order at average150 transaction on EURUSD, at first i use non ecn broker service, 2 pips spread on eurusd which means, 150 x 2 pips, 300 pips monthly cost in total, but now my result getting better as I moved into armada market, an ECN brokerage service with 0.3 spread charged on eurusd, spread cost are 0.7 pips x 150 trades equal to 105 pips monthly cost. have anyone ever consider how spread cost your trade. and yess indeed ecn brokers cost cheaper, now i have 195 pips additional profit. before start and pick up your desired trading style, better consider how much it cost, what benefit and what the risk. scalping are commonly an overtrade system, which means spread does matter with this trading system. all the best for you all

The easiest way to check the spread is from your Market Watch window inside the Metatrader4 terminal. We've highlighted the EUR/USD in the window where you see that the spread is 0.1 pips (difference between Bid of 1.33849 and Ask of 1.33850).

So, why are low spreads important?

Spread and commission is the cost of trading. For example if you trade 1 lot of EUR/USD which is equivalent to around 134,000 US dollars and the spread is 1 pips then your spread cost is 10 US dollars.

Let's take a look at the spreads of Armada Markets on Exchange account. the spread on EUR/USD is 0.3 pips (courtesy of Myfxbook). If you traded (open and close order) 1 lot of EUR/USD right now then your spread cost would be 3 US dollars. Spreads fluctuate all the time depending on the market conditions and they can go as high as 2 pips, even 5 or 10 pips if there is maximum uncertainty and some big news come out. Big news are central bank interest rate announcements, major economic news (US jobs report, EU retail sales, etc).

Let's imagine that the same trader has also a trading account with another FX broker named BobFX and their average spread is 2 pips. The spread cost per on lot of EUR/USD would be 20 US dollars. As he made 100 trades then the total spread cost for him would be 100 * 20 USD = 2,000 US dollars.

So, at Armada your spread cost for 100 trades would be 100 US dollars, while at BobFX it would be 2,000 US dollars or 1,900 US dollars more. This means that also your profit at BobFX would be 1,900 US dollars less compared to Armada.

[William Weir]

I can’t say about others but since I am a scalper I cannot trade if the spread is high, it is too risky. I love trading with OctaFX because they are one of the best companies for scalping. They have perfect spread of just 0.2 pips for all major pairs so we can smoothly do scalping without any restrictions so we could close out trade even inside 10-15 seconds while they themselves allow us to use this technique written on their terms and conditions.

[Marty Landry]

I can’t say about others but since I am a scalper I cannot trade if the spread is high, it is too risky. I love trading with OctaFX because they are one of the best companies for scalping. They have perfect spread of just 0.2 pips for all major pairs so we can smoothly do scalping without any restrictions so we could close out trade even inside 10-15 seconds while they themselves allow us to use this technique written on their terms and conditions.

That is wrong mate because if you are a true scalper or a good trader then spread should not make any difference and if you are not able to trade then it is a real concern that you must work on to correct otherwise you will never able to succeed. Although I also wish similar to all about low spread with just 0.2 pips and also get it with the same broker like you OctaFX, it is a truly wonderful company and no one ever can deny this fact especially ones who have even traded once with them.

[pra_scalper]

Is it floating spread or fix spread sir?. If floating spread, we must wait a moment to get small spread or we will get huge spread with it. I most like using fix spread and I'm already making money in Liteforex on their Lite Account. Interesting place for gaining consistent profits.

[gacha]

brokers that have minimum stop levels and limits are guaranteed market makers. Also, you should ask them directly about their scalping/hedging policies too - the answer will give you a clear indication the brokers "real" operation. my trading strategies are tickscalper one, and these stoplevels/limit are crucial feature. many claim their platform are ECN, but in reality they put vary stop levels/limit, 20 pips over 50 pips. but i feel gratefull when I found Tickmill, the did provide fully advantage upon their trading condition, 0 pips stop levels/limit, low transaction cost (3.8$ round turn), and they even offer 15% deposit bonus for new client

[Haydar Ali]

Low trading spreads always inspires me to make quick profit. So, as a scalper I like to trade with low trading spreads. Even, it’s also helps me to make handle my trading plan. That’s way, when I was in my demo account from then my main intention was to find a regulated trading broker which offers low trading spreads for trading. In addition, I get TradingBanks trading where I can trade by only one pip trading speeds for major currency and also get low trading spreads for others trading pair even for gold trading. I get best trading environment for trading from this regulated trading broker.

[Tanzil Al Banna]

High trading spread is the main barrier of earning big profits. So, I am completely avoiding which brokers are unable to provide this useful service. Basically, for doing my live trading TradingBanks broker is my best choice. Since, this ECN broker provides fixed low spread facility for all kind of trading instruments.

[tianxiawuzeii]

Spread can be regarded as your trading cost, but 0 spread maybe not good, we should check all factors about broker, such as withdrawal, system operation, customer service etc.

[Gaban]

trading with a broker that provides low spreads very profitable for traders because of the low spreads then we will be able to trade with the maximum, because we do not cut the spread of capital which is great so we will have greater opportunities

[Mark Burmester]

I think this is not necessary, at least not on my part. I believe having low spreads can be handy but this is not something you put on the line with selection of good broker. I am saying this because this is something of a trick now days with wrong brokers, we will see them offering zero spread and such while in reality they charge heavy commission and all that zero spread thing go into air. I am better off with honest brokers which might charge more initial instead of hidden way. I am happy that with OctaFX, I am paying just 0.2 pips for all major pairs while there are no hidden commissions here which make me pretty comfortable with everything.

[Umama Rana]

We the traders who are particularly scalpers need trading brokers which allow scalping without any restrictions. that’s why, as a scalper, I have chosen MXTrade trading broker which for all time make sure best trading environment for scalping by providing only one pip lowest trading spreads which is very supportive to make profit with certainly by scalping.

[usok]

when u understand the concept of spreads, and link if to scalping you will get why scalpers need low spreads to get maximum profit, on the other hand spreads are like taxes, we all crave for low taxes coz its like our extra profit lol

[Mark Hoffman]

I need it as an extra help, but not the first priority because for me that’s always security and comfort in terms of freedom. I work with Vinson Financials broker and with them, I never have to change my priority yet I get my wishes filled, this is to do with them been regulated and highly reliable while their conditions such as spreads is top draw with been down to 0.7 pips while the leverage is pretty impressive too up to 1:500 and very smooth trading platform too!

[Money Morkel]

Actually, in spite of good trading knowledge that’s not possible at all to make profit constancy with certainly without lowest trading spreads. so, I have chosen Trade12 regulated trading broker in my trading career which for all time make sure best trading environment for using any kinds of trading strategies with scalping by providing only one pip lowest trading spreads.