Low Spread Forex Brokers.
Choosing a forex broker can be a daunting task. Finding an appropriate business partner that will provide access to the currency trading market at a reasonable cost, will protect your funds at all times through best business practices, and that will respond quickly and effectively when you have a question is not easy, especially when you must deal with someone you may never see “face-to-face” or that resides overseas.
Unfortunately, many traders focus too heavily on cost factors, preferring to go for the broker that advertises “the tightest spreads in the industry” or “near zero spreads on most major pairs” . The facts are that brokers understand their cost structures extremely well or they would never venture into such a business venture. Their objective is to recover their costs in one way or another, the point being that if they subsidize very low spreads, then they plan to make up the difference somewhere else, either in other fees, slippage and poor execution, or low quality customer service and support.
- Over 400k Account Registered.
- More than 250 Trading Instruments.
- MT4, MT5 and Web Trader Platforms.
- Full ECN Trading Model.
- Active 10+ years.
- 40% New Member Bonus.
- Very well regulated.
- Support in 18 languages.
- Negative balance protection.
- Social Trading Platform.
- 24/5 Customer Support.
- Multi Asset Trading Platform.
- No Time Frame for Demo Accounts.
- Very well regulated.
- Social Trading Features.
- Available in 25 languages.
- 24/5 Customer support.
- No withdrawal fees.
- Three trading platforms.
- No dealing desk executions.
- Account management for traders on varying experience levels.
- Up to 1:500 leverage with micro-lots (0.01 size) available for everyone.
- Scalping, hedging, trading on the news, and EAs are permitted.
- Forex Pais and CFD Trading.
- Cash back loyalty bonus. Earn up to £1.80 cash back per lot.
- Tight Spreads as low as 1.2 pips.
Does the broker type favor low spread offerings?
Forex brokers basically come in two types – ECN brokers or brokers that are market makers. The former passes through your orders directly to its liquidity providers to be executed at their prevailing spreads, which may vary over time depending on supply and demand, but tend to be razor thin. ECN’s may offer a lower spread, but they recover their costs in other ways through commissions or transaction-based pricing. Depending on your trading style and level of activity, an ECN’s pricing structure, when looked at on a total “all-in” basis, may actually be a lower alternative than the typical market maker type of broker.
A market maker, on the other hand, makes his income totally on the “Bid/Ask” spread, which is multiplied if you elect to employ leverage in your trading strategy. This type of broker acts as an intermediary between you, his client, and his bank or broker liquidity providers, choosing rather to “arbitrage” for profit the spread that he offers to you against what he can buy and sell in the market on his own behalf. Each day, the firm maintains an instantaneous accounting of the “overs” and “shorts” for each currency pair. If he is losing at one point, the spread will be slightly increased to make up the difference over time, but the objective is to hit a profit target for each pair at the end of each day.
What to be wary of when choosing a low spread forex broker?
In the business world, all competitors choose to compete either on cost or on quality of service. One cannot be the best at both. In other words, if a forex broker offers “the lowest spreads in the industry”, then it stands to reason that the firm is cutting back on its quality in some other department, will charge other hidden fees that are not immediately apparent, or will resort to bad business practices to disguise its recovery of costs in an unscrupulous manner.
The latter item should be a true concern when low spreads are offered. The first two items will reveal themselves in your due diligence phase of review by comparing the broker’s offerings to the competition and by reviewing customer testimonials or independent reviews of the broker. Bad business practices, however, are more insidious, in that you are at the mercy of your broker. Your only recourse may be to terminate your business arrangement and, hopefully, withdraw your account balance without any delay.
Bad business practices tend to show up in many ways. The first may be in constant re-quoting. You see a quote you like, act upon it with an execution order, but all you get back is a server message with a different quote asking you to try again. The broker chose to block your first request for his own profit reasons, although if you waited beyond an acceptable period of time to act, then the broker may well have been within his rights to re-quote.
Slippage is another practice that can spoil your trading experience and lead to unwanted losses of your precious capital. Slippage results when you send an execution order at a stated price, but it gets executed at another one. The broker will argue that the market is volatile or that you delayed in acting or that a major data release caused the market to abruptly change, but if none of these situations are at hand and slippage occurs frequently, then it is time to question your choice of broker.
Lastly, perhaps the most frustrating bad practice is spread manipulation. Your broker, if he is a market maker, can post whatever quotes are in his best interest at any time. Setting spread quotes is what a market maker is all about, but the unscrupulous ones may suddenly enter quotes that are not necessarily seen anywhere else in the market, i. e., from an independent Reuter’s quote feed or another broker. This manipulation most often occurs when the market is in a tight range. Brokers do not make money under these conditions. When orders start to appear for a big move, the quotes may first go in the opposite direction, roughly 20 to 30 pips, just the right amount to clear out any stop-loss orders and to prevent traders from benefiting from the move. The broker then pockets the profit from those closed client positions in this case.
Concluding Remarks.
No one is suggesting that all low spread brokers are bad, just that you should be aware that a low spread broker must make up the difference in some other area. You may not need education materials or customer support. You may want a broker that truly focuses on a low spread and is willing to cut corners in other areas, as long as the firm adheres to best business practices in its execution of your orders.
At the end of the day, spread is important in your broker choice, but you should strive to understand where other hidden costs might be and whether the quality of service might be low, the first complaint that is typically raised in customer testimonials on the Internet. Take your time on the front end to choose your broker wisely.
Best ECN Brokers With The Lowest Spreads and Commissions.
Last Updated Dec. 18, 2017.
A low spread is one of the main criteria of a trader when choosing a broker. Scalpers and trading robots in particular, which are the most frequent traders, need a low cost transaction fee as much as possible, and an ECN broker that offers tight spreads with low commissions is the best option.
Why trade with the best ECN Forex Brokers?
Global Prime FX is an Australian based broker located in Sydney and is currently regulated by the Australian Securities and Investments Commission (ASIC). This broker boasts of it's transparency, top tier customer support, and Prime Broker relationship.
Min Deposit: $200.
Exness is based in Saint Vincent and the Grenadines and is currently regulated by the Cyprus Securities and Exchange Commission (CySEC), and Financial Conduct Authority (FCA) in the UK. This broker was founded in 2008 and is now one of the leading forex brokers. They also disclose their liquidity providers which proves that they are also a true ECN broker.
- Offers raw spreads from Interbank Foreign Exchange Market.
- No minimum Stop Loss and Take Profit levels.
- Provides quick withdrawals, not only deposits.
- Quick response from customer support representatives.
- Does not trade against you by hedging your trades/taking the other side of your trades, but instead routes your orders to their liquidity providers or matches it with other clients' orders.
- Charges commission for each trade instead of spread markups.
- Tighter spreads due to strong competition from several liquidity providers.
- Prices are much more volatile which is good for scalpers.
True ECN Brokers have Market Maker systems too.
The potential of forex trading.
So if you're just starting out, it's best to start with a small capital and trade using the smallest lot size. This way you won't lose a lot and will be able to stay longer in the market.
Last Updated: Dec. 18, 2017.
49 comments:
i'm currently with ic and yes they have very low spreads. i also try other brokers to compare spreads but ic is my main broker.
I like that you provided a detail about how to identify true ecn brokers. Thanks for this info.
I agree with IC Markets being included in this list. Its true that very few brokers disclose their liquidity providers, thats why im glad that I transferred to ICM.
You made the right decision man.
Hello, which broker are you currently using?
I'm currently with IC Markets because they are good for scalping.
why fxcm not in this list?
FXCM is not ECN Broker, they are NDD but not ECN.
My broker FXPro is not in the list.
I actually ed and asked FXPro if they are an ECN broker and they said they're not. I think they are NDD/Market Maker Broker.
I didnt care before if its market maker or ecn im trading with, buy now after reading this conflict of interest, it opened my eyes.
It doesn't really matter if your account is less than $1000, but if it's more than that, it's better to trade with an ECN.
Hello admin, which of these 3 brokers do you think is the best based on your experience? Waiting for reply.
I can't say which, because all these brokers are excellent. But I can assure you that they are one of the best.
Nice info. Now i know what is a true ecn broker.
hello. Which kind of trader do you think is best? Scalper, intraday trader or long term trader?
I think the best is the long term trader because they are the least stressed type of traders. They just open positions then they leave it for days or weeks, unlike scalpers and intraday traders that have to keep a close watch on their trades.
Hello sir. Im newbie, I would like to know what trading strategy and leverage do you use.
I'm actually a long term trader now from being a scalper. My strategy is Swing Trading and Breakout Trading, and my leverage setting is just 1:50.
very good write up.
eToro is the ultimate forex trading platform for new and full-time traders.
eToro is popular, but they are a market maker broker which I don't recommend.
I agree eToro is not that good. They were my first broker. The whole social trading thing they have, where you can follow and copy other traders was nice, but that was it. Spreads were VERY high, and my trades always seemed to lag 2-3 pips behind their charts when I started winning.
Lots of information in this article, I learned a lot. thanks.
Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed. For success in Forex trading its important to followtrue reliable forex signals services for the good profits on your forex trading investments. Sometimes the people around you won't understand your journey. They don't need to, it's not for them.
I checked out your website and it looks promising. I will give the 7-day trial a go and see if it's worth it.
Sure, subscribe to the trial version, get 60% plus accurate trading signals and make good profit ratio on your investments.
I only see advantages of trading with an ecn broker. Arent there any disadvantages?
mmmmmm. I can't think of any. hehe.
Is FxTM also an ECN broker?
I read online that fx broker Alpari dont offer any commission on their ECN Mt4 account, does this mean they aren't a true ECN broker?
They don't charge commission on their ecn. mt4 accounts but they do on their pro. ecn. mt4 accounts. So they are also a true ecn broker.
So why you didn't include them? I'm asking this cause they offer lower commissions: (2$ per lot for opening or closing a trade = 4$ per lot). Also their commission really depends on the % of lot, for instance 0.8 lot will cost 2x2x0.8=3.2$ and not 4$.
Thanks for the write up, pls which broker can you recommend for fundamental trading.
I would strongly recommend you.
Global Prime since they are good for fundamental traders.
My broker says they are ecn but they have fixed zero spread. Now I'm having doubts, thanks for this info.
If they have an ECN Account that has variable spreads, that's the account type you should choose. But if they don't have that, then they a are fake ECN broker.
Thanks for the advice.
Whats the major differences between ECN brokers and ND/Market Maker brokers? Please enlighten me and then if ECN brokers are better, why is the majority still using the other brokers.
There are 2 main differences.
Why is not Pepperstone in the list. I saw them in many ECN broker rankings.
I know a person who was profitable but was suspected of arbitrage trading by Pepperstone even if he wasn't. Pepperstone closed his account for being profitable, not for violating their Terms of Service.
what advice can you give between windsor brokers and fxpro? and are these ECNs? thank you.
FxPro is much better compared to Windsor Brokers. I checked the Windsor Brokers website and there are even wrong spellings in the homepage, I think that they are just a white labeled broker.
thanks for your feedback i almost invested with windsor brokers, after trying out their demo with very tight spreads and low commissions of 0.18 per 0.01 lot size. i thought they really have best terms. so sir which ECN broker that's well regulated and has good customer service can you recommend. thank you.
Try Global Prime above, just use the discount link I provided. They only charge 0.06 per 0.01 lot.
Low Spread Forex Brokers 2017.
Forex brokers with low spreads are especially popular among scalping supporters, because this trading strategy means opening a lot of deals within one day, and under these conditions a commission may amount up to 100 pips. To cut their costs on forex operations the traders opt for dealing desks with low spreads. There are traders who consider this to be the main selection criterion. Due to low spreads financial losses decrease, which favorably compares with the basic principles of a trader: to make profit and to secure personal funds. Brokers which are listed here offer floating and fixed spreads of different values, but always either on minimal or medium levels. Of course, it is possible to make a big initial deposit, but brokers offering micro and mini accounts allow trading bit-by-bit anyway.
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7 Regulated Forex Brokers with Tight Spreads.
When you trade in Forex you are not buying and selling currencies, but are making wagers upon whether currencies will rise or fall in value. You always opt for paired currencies to trade, in expectation your chosen currency will rise against falling prices of the paired currency. One of the best ways to assist learning Forex trading is to trade in the currency of your own country at first. You are more likely to recognise developments and news releases that will affect the price of your own currency, so profits may well be higher. When you have developed a confident trading manner, move on to trading global currencies.
Most brokers provide demo accounts, allowing new customers the ability to find out more about Forex trading before depositing capital. You can also source a good deal of free information, learning, education and seminars or webinars from good brokers, if you want to learn to trade successfully and with confidence.
If you’re searching around for trusted and regulated forex brokers offering the best tight spreads for 2017, check out the following listing:
1. Core Spreads.
Core Spreads provides a good welcome bonus of up to 50 percent on the first month’s spreads, and offers traders some of the tightest spreads available in the industry, starting at 0.7 pts. The CorePoints loyalty programme is a good way to earn cash rebates, based on trading activities throughout the month and provides up to 25 percent in bonuses.
2. ETX Capital.
ETX Capital is an award-winning British broker providing a variety of platforms to clients. The forex trading platform provides very tight spreads on popular currencies, from 0.7 for EUR/US$ to 0.9 for EUR/YEN and AU$/US$. ETX Capital is fast establishing itself as one of the most popular and trusted forex trading brokers in the market.
3. Spread Co.
This broker provides tight spreads across various currency pairs, for example EUR/US$ and offers new traders opportunities to learn about spread betting on Forex via a useful demo account. If you’re new to trading Forex take as much time as needed to learn tricks of the trade via the dummy account. Spread Co is a British company and regulated by the Financial Conduct Authority in the UK, one great aspect of this provider is that low cost trading gives clients chances to trade for just £1 per point.
4. CMC Markets.
This is a popular choice amoung new traders, with access to a great free demo account with excellent charting. CMC Markets has tight spreads which start at 0.7 pts and with 330 currency pairs to choose from, there’s sure to be a pairing to suit any trader. Clients who trade regularly each month may qualify for the CMC Rewards programme which provides cash rebates on all qualifying trades.
5. 3D Markets.
This company also gives frequent traders cash back at the end of each month. The rewards system pays up to 10 percent of the total monthly spread straight back to customers. With 3D Markets traders can trade forex as a spread bet or CFD, with more than 35 currency pairs to choose from. 3DMarkets spreads are fixed during market hours and start at 0.8 pts. This broker provides a demo account to new customers with £25,000 in virtual cash to trade.
6. Markets.
New customers can sign up for a £100,000 practice account with Markets to learn to trade forex online. The broker gives a £25 welcome bonus and has tight, competitive spreads. Clients can trade a variety of currency pairs, including exotics and virtual Bitcoin.
7. DF Markets/a>
DF Markets is a UK-based forex trading provider, giving tight spreads at low rates of commission. Leverage up to 200 times the cash deposit is available, so clients may only need to deposit £100 but will have ability to trade up to £20,000.
When you’re selecting Forex brokers to handle your trades, don’t be swayed by the best welcome bonus deals alone. Insist that the brokers are registered and regulated by a trusted body such as the Financial Conduct Authority in the UK or CySEC in Cyprus, these authorities provide customers with the best protection against unscrupulous brokers. All Forex traders must be over the age of 18 and need to be fully aware that dealing in currencies via brokers can be a risky investment. Don’t to trade more than you can afford to lose.
Disclaimer: Some of the links in this article may use affiliate links, meaning that we receive a commission if you setup an account with a broker after visiting them through our link. These commissions help to cover the costs of running this website, and do not add any extra cost to you (in some cases, it provides you with better rates), as our commission is covered by the broker.
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