trading with fixed spread could save you during big spikes and is a bit better for news trading, but with fixed spread you pay a lot more in the mark up as with dynamic spread. If you accept the risks of the market and the dynamic srpeads you are paying less for your trading volume. Paying 1.5 Pip fixed Spread for 1 lot is more expensive than lets say paying 8 EUR Commission with dynamic 0.2 Pips spread . The difference is 5 EUR for each 1 lot traded.
Oct 25 2016 at 07:28
Well even fixed spreads are stretched during news.
It all depends on strategy, but I usually stay away from fixed spreads, because sometimes, brokers are having mark up on the fixed spreads. But some EA's are better working with fixed spreads, so like I explain before it all depends on the type of strategy that you are using.
I vote for the variable spreads in combination with real market execution. They reflect the true pricing which is always a dynamic dimension. Better also to have the commission charged additionally, not in the spread.
Accept the loss as experience
togr posted:
Well even fixed spreads are stretched during news.
And there is a reason for that 😉
Accept the loss as experience
Oct 27 2016 at 12:51
In my view, variable spreads are better than fixed spreads. The reason being is the trading cost. For example, normally in case of variable spread, a commission (like around $4 per $100k) is charged to you and the average spread tends to remain around 0.3 or 0.5 pips so the total trading cost tends to remain below 1 pip (while it also depends on broker to broker, if you are going for ECN or STP account and what commission they are charging). While, in case of fixed spread, in normal market conditions the trading cost remains generally higher at 2 pips. If you go for variable spreads, during the time of high volumes, it can go to 0.0 pips as well for EURUSD or GBPUSD, in that case your variable cost goes even further down but it does not happen in fixed spread thus leading to higher trading cost. Also, fixed spreads don’t remain the fixed always, at the time of news, even fixed spreads get widen, you will see your spread fixed at say 2 pip only however if you try to buy or sell, you will see a different execution price from what you are seeing.
olivia_jones posted:
In my view, variable spreads are better than fixed spreads. The reason being is the trading cost. For example, normally in case of variable spread, a commission (like around $4 per $100k) is charged to you and the average spread tends to remain around 0.3 or 0.5 pips so the total trading cost tends to remain below 1 pip (while it also depends on broker to broker, if you are going for ECN or STP account and what commission they are charging). While, in case of fixed spread, in normal market conditions the trading cost remains generally higher at 2 pips. If you go for variable spreads, during the time of high volumes, it can go to 0.0 pips as well for EURUSD or GBPUSD, in that case your variable cost goes even further down but it does not happen in fixed spread thus leading to higher trading cost. Also, fixed spreads don’t remain the fixed always, at the time of news, even fixed spreads get widen, you will see your spread fixed at say 2 pip only however if you try to buy or sell, you will see a different execution price from what you are seeing.
I also agree that fixed spread can be more costly over long term!
Trading is like football - if you don't practice you can't win the game!
I prefer the floating spreads but also to have the commission separate and shown in full when I open the trade. This gives me a clear picture of the costs involved and how much should I earn at least to be on profit.
Trading is like football - if you don't practice you can't win the game!
BaldoN posted:
trading with fixed spread could save you during big spikes and is a bit better for news trading, but with fixed spread you pay a lot more in the mark up as with dynamic spread. If you accept the risks of the market and the dynamic srpeads you are paying less for your trading volume. Paying 1.5 Pip fixed Spread for 1 lot is more expensive than lets say paying 8 EUR Commission with dynamic 0.2 Pips spread . The difference is 5 EUR for each 1 lot traded.
Very good point and great explanation. Thanks for this
I like trading with fixed spread, personally because I feel free more secure when there are sharp movements during news. I understand that of course dynamic spreads might be cheaper some times, but it can also be more expensive.
