Dec 16 2020 at 17:27
Traders also should look tight spreads. During Volatile market spreads often become wider than usual.
Dec 17 2020 at 07:50
LyudmilLukanov posted:ok i will check these factors
Traders also should look tight spreads. During Volatile market spreads often become wider than usual.
Jan 07 at 08:55
I prefer low commissions and lower spreads. This works well for me instead of the other way.
Jan 08 at 04:40
asidefellow posted:
I prefer low commissions and lower spreads. This works well for me instead of the other way.
same goes for me too any suggestion of the broker?
The lower the spread the broker offers, the better for trading. That is why my choice was on the Amarkets broker with a spread of 0.2 pips.
Feb 04 at 16:14
richardmarcus posted:
what kind of spreads do you look for in a broker, higher commissions, and less tight spreads or the other way around?
Im a scalper too and i prefer lower spreads as it is a purer price move.
LyudmilLukanov posted:
Traders also should look tight spreads. During Volatile market spreads often become wider than usual.
Absolutely right. This principle also applies to the pairs that typically have more volatility all the time, like the NZD or GBP pairs. Traders need volatility to make money. Volatility is a good thing, regardless of what they tell you on CNBC. Once a trader takes a position in a currency pair, price needs to move in order for it to make money. Traders therefore tend to gravitate to trade the pairs that move the most day after day.
Brokers know this and will exploit it by increasing the spread/commission required to trade more volatile pairs, especially around the time of fundamental announcements and daily rollover (usually around 5pm to 6pm EST - which is UTC minus 5). The spread can go from 1.5 pips to 10 or 15 or even 20 pips!
Therefore, when researching brokers, don't just look at their claims of offering 0.0 pips on EUR/USD. That's the bait, and as any fisherman knows, bait is always accompanied by a hidden hook! Brokers are in business to make money, and you WILL pay transaction costs one way or another, either upfront, or through other more serpentine ways. You should have a better experience sticking to large, well-regulated brokers, even if you pay 2 or 3 pips per trade.
Think about the math.
Most forex traders have an account funded with less than $2000.00. Each trade you put on should risk less than 2-3% of your capital. That means if you have a stop loss of 50 pips in order to make a return of 100 pips, and you have 200:1 leverage in your account, you should not be trading more than 8 to 10 micro lots. That works out to be about 80 to 100 cents per pip. For each trade on, lets say, GBP/NZD, you are paying your broker about $2.40 to $3.00 if your spread is 3 pips.
That's not a lot!
If your broker offers 0.0 pips spread, but charges you a commission of $3.50 on every trade, you are actually PAYING MORE in transaction costs! This is the reality for most beginning forex traders, and I would suspect that a large percentage have accounts that are $500.00 or less, which means the problem is magnified even more.
Therefore, I would recommend that if you are searching for a quality broker to start trading forex with, stick to the large, well-run, well regulated brokers that offer you a simple, reasonable pip spread with zero commisions and STP (Straight-Through-Processing).
Happy Trading!
Start with EQUITY MANAGEMENT
Feb 09 at 04:39
MichaelEX posted:
Tight spread with low commission.
any suggestions...can you inbox me ?
