In the Forex world, there are two sorts of spreads offered by Forex Brokers towards their traders. This implies they can trade shrink on a Fixed spread or Variable spread as it were. There are numerous traders that will choose to open an account with a particular Broker simply because of the spread sort that the Broker offers.
Also, I noticed another kind of spreads. So here on myfxbook while I was searching for broker spreads to compare between fxview and ICM, I noticed that there are spreads and spreads+commission, it actually made a lot of difference, on the overall cost of my trade.
Choosing fixed spreads or variable spreads depends on the situation I am in. When I will be entering and exiting a trade in a few hours, I prefer fixed spreads and when it is about making a long-term investment, I go for variable spreads.
Fixed or variable spread depends upon your trading strategy. personally i prefer variable spreads as i am pretty much aware of the times when generally the spreads are high or low in the market. So I only prefer trading when market has good liquidity.
I am not sure about others but I usually trade with ECN brokers that offer transparent trading environments. And because of this, it doesn’t really matter whether I am using variable spreads or fixed ones.
I really don’t think that using fixed spreads or variable spreads has much impact on your bottom line as a trader. It is your trading style and risk appetite that determine the best spread structure that you must opt for.
Choosing the right type of spreads is more of a personal choice. Just because variable spreads work better for me, I can’t be sure that they will work for you also. You will have to determine that yourself.
HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors.
Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
You could lose some or all of your initial investment. Do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
Any data and information is provided 'as is' solely for informational purposes, and is not intended for trading purposes or advice.
Past performance is not indicative of future results.