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Do forex spreads make a significant impact on the long term trading results?
Členem od Jan 16, 2014
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Feb 18, 2014 at 22:40
Členem od Jan 16, 2014
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I recently did an audit of my live forex accounts and found something very interesting that I wanted to share and see what other think. To give you some background, I have 2 live accounts, at totally different US forex brokers. I tend to use 1 account to trade swing positions and the other to do interday trades. Since 1 broker offers me around 1.8 pips on eur/usd and the other is 1.2 pips, I tend to keep my daily trading on the lower spread account and figured the higher spread would be fine for my swing trades. However, after looking at my 2013 statements for both accounts something jumped out at me; which was that I would have been about 25% more profitable if I would have traded on the lower pip spread for my swing trades, since each time I traded on that account I was paying about $8 more per 100K I traded. Over the year, this accumulated to over $3500 MORE in trading fees! When I brought this up to my account rep at the broker with the higher spread , he simply pointed out other benefits of being with the company , like features, tools, ect... which means nothing to me if it costs $3500 extra to have things I really dont use or need to be successful in my trading, and when I tried to get back to the point about my spreads, the only solution he offered was depositing more funds into my account which I don't need to do at the other broker to basically get the same pricing anyway. Point is, my experience and trading statements reveal that spreads can be the difference between making profits and possibly even losing money, regardless of how many trades I make, the money adds up! What about everyone else? - BTW dont want to name drop brokers but if anyone wants to know they can message me here.
Členem od Feb 22, 2011
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Feb 19, 2014 at 07:18
Členem od Feb 22, 2011
4862 příspěvků
Well yes spread is cost of each trade you make. So with high spread the otherwise profitable trade can be losing one at the end.
Also from my point of view the lag or latency could be a the same problem. So execution speed is very important too.
For me as European trader is very important to have also high leverage so I can use my small capital wisely:)
You should go with low spread broker like IcMarkets
0.55 comm + 0.1 spread = app 0.7 spread on EURUSD
[referral link removed]
Also from my point of view the lag or latency could be a the same problem. So execution speed is very important too.
For me as European trader is very important to have also high leverage so I can use my small capital wisely:)
You should go with low spread broker like IcMarkets
0.55 comm + 0.1 spread = app 0.7 spread on EURUSD
[referral link removed]
Členem od Nov 21, 2011
1718 příspěvků
Feb 19, 2014 at 10:16
Členem od Nov 21, 2011
1718 příspěvků
You can read page 2 of the topic what I think about spread.
https://www.myfxbook.com/community/general/brokers-why-do-we-still/698266,1#?pt=2&p=2&o=698266
https://www.myfxbook.com/community/general/brokers-why-do-we-still/698266,1#?pt=2&p=2&o=698266
Členem od Jan 16, 2014
416 příspěvků
Feb 19, 2014 at 19:53
Členem od Jan 16, 2014
416 příspěvků
togr posted:
Well yes spread is cost of each trade you make. So with high spread the otherwise profitable trade can be losing one at the end.
Also from my point of view the lag or latency could be a the same problem. So execution speed is very important too.
For me as European trader is very important to have also high leverage so I can use my small capital wisely:)
You should go with low spread broker like IcMarkets
0.55 comm + 0.1 spread = app 0.7 spread on EURUSD
[referral link removed]
I like ICMarkets but keep in mind that their spreads are so low because they do a little fore running.
Členem od Feb 20, 2014
2 příspěvků
Feb 20, 2014 at 22:19
Členem od Feb 20, 2014
2 příspěvků
ic not open account for usa client. In usa is very hard open account where is spread under 1 pip complete.... too big regulation
best cashback for ic markets 1,6usd. For armada 10%. Best cashback for other 30 brokers.
Členem od Jul 11, 2013
4 příspěvků
Feb 22, 2014 at 09:27
Členem od Jul 11, 2013
4 příspěvků
For us citizen you should try fastbrokers or finfx.
Členem od Dec 13, 2013
1 příspěvků
Feb 26, 2014 at 06:33
Členem od Dec 13, 2013
1 příspěvků
In fact , many US broker's offer spreads typically less than 1 pip. However, depending on the broker someone trades with, minimum initial deposits may apply like any other location in the world. It's possible due to additional leverage options outside the US , some of those minimums may be lower, but if someone trades with significant capital and trades actively, they SHOUlD be able to find pricing that low. If this isn't the case, they probably haven't looked around that much or asked their broker to make things right. Plain and simple.
Členem od Sep 08, 2013
4 příspěvků
Feb 26, 2014 at 06:33
Členem od Sep 08, 2013
4 příspěvků
I got .9 at fipfx in the US and now I get .7 at fipglobal. Only opened with 10k
Členem od Jan 25, 2014
4 příspěvků
Feb 26, 2014 at 06:33
Členem od Jan 25, 2014
4 příspěvků
I have this argument with my friends all the time! Spreads are fees , fees=less money than you had before. Yes, spreads make a difference in long term trading, unless of course you lose all your money and there is no long term trading for you at all 😄
It obviously makes a difference then , what pairs you trade, but that's semantics people! id use fipfxglobal
It obviously makes a difference then , what pairs you trade, but that's semantics people! id use fipfxglobal
Členem od Jan 16, 2014
416 příspěvků
Feb 26, 2014 at 20:35
Členem od Jan 16, 2014
416 příspěvků
I believe the best is if you simple check the brokers spread section here on myfxbook.
Členem od Mar 26, 2014
21 příspěvků
Jun 22, 2014 at 06:49
Členem od Mar 26, 2014
21 příspěvků
Spread matters in any situation. You will earn lot more money with a low spread broker.
Get 20% discount on IC Markets
Členem od Jun 09, 2011
186 příspěvků
Jun 23, 2014 at 04:31
Členem od Jun 09, 2011
186 příspěvků
a GREAT big deal lol, spread definitely matters, alot.
http://www.freeforexrebates .info
forex_trader_194159
Členem od Jun 09, 2014
38 příspěvků
Jun 23, 2014 at 06:36
Členem od Jun 09, 2014
38 příspěvků
I agree that matters, but the most important things is the execution, meaning No requotes or Sleepage
Členem od Feb 18, 2014
86 příspěvků
Jun 23, 2014 at 09:51
Členem od Feb 18, 2014
86 příspěvků
It matters enormously. Agree with Gabriel that you must look at TOTAL spread, or whatever you prefer to call it. This is the total cost of execution. For a system that has 5 pips/trade average, and you have a total spread (read:cost) of 2.5 pips/trade, half your profit goes to the broker.
Členem od Feb 22, 2011
4862 příspěvků
Jun 23, 2014 at 12:47
Členem od Feb 22, 2011
4862 příspěvků
growthera posted:
It matters enormously. Agree with Gabriel that you must look at TOTAL spread, or whatever you prefer to call it. This is the total cost of execution. For a system that has 5 pips/trade average, and you have a total spread (read:cost) of 2.5 pips/trade, half your profit goes to the broker.
so what would be total cost?
spread + markup + commission + slippage?
Členem od Feb 18, 2014
86 příspěvků
Jun 23, 2014 at 14:53
Členem od Feb 18, 2014
86 příspěvků
yes, minus maybe some kind of rebate/cashback you may have with that broker.
What exactly do you mean by markup? Some cost on social trading websites or something else?
What exactly do you mean by markup? Some cost on social trading websites or something else?
Členem od Feb 22, 2011
4862 příspěvků
Jun 23, 2014 at 19:58
Členem od Feb 22, 2011
4862 příspěvků
growthera posted:https://en.tradimo.com/tradipedia/markup/
yes, minus maybe some kind of rebate/cashback you may have with that broker.
What exactly do you mean by markup? Some cost on social trading websites or something else?
forex_trader_107338
Členem od Jan 18, 2013
22 příspěvků
Jun 24, 2014 at 11:24
Členem od Jan 18, 2013
22 příspěvků
I always did find it difficult to find out exactly how much % wise I am paying in total charges, spread + commission.
Pepperstone charge less commission than ICMarkets but some of their spreads are higher.
Having variable spreads makes the comparison much more difficult as the goalposts constantly move.
Swap rates are also very different on these 2 brokers.
Pepperstone charge less commission than ICMarkets but some of their spreads are higher.
Having variable spreads makes the comparison much more difficult as the goalposts constantly move.
Swap rates are also very different on these 2 brokers.
Členem od Feb 22, 2011
4862 příspěvků
Jun 24, 2014 at 11:30
Členem od Feb 22, 2011
4862 příspěvků
buster891 posted:
I always did find it difficult to find out exactly how much % wise I am paying in total charges, spread + commission.
Pepperstone charge less commission than ICMarkets but some of their spreads are higher.
Having variable spreads makes the comparison much more difficult as the goalposts constantly move.
Swap rates are also very different on these 2 brokers.
it is quite easy you know the spread e.g. 0.2 pip and the commission 0.8
so your total cost is 1.0 pip
plus some change due to delay from trade request/trade execution - this could be both positive and negative
forex_trader_107338
Členem od Jan 18, 2013
22 příspěvků
Jun 25, 2014 at 09:24
Členem od Jan 18, 2013
22 příspěvků
So for example Usd/Jpy, I have a 0.05 position open.
Commission = 23p
spread is flicking from 0.2 - 0.4 (Not sure what it was the moment I opened the trade).
Pepperstone do offer a commission free account where the spreads are larger. Apparently it is the same total cost whichever of the 2 accounts you decide use.
I do get a monthly commission rebate though from a company I signed up with a couple of years back which helps.
Commission = 23p
spread is flicking from 0.2 - 0.4 (Not sure what it was the moment I opened the trade).
Pepperstone do offer a commission free account where the spreads are larger. Apparently it is the same total cost whichever of the 2 accounts you decide use.
I do get a monthly commission rebate though from a company I signed up with a couple of years back which helps.
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