Spread is a one of the most important factors which decides whether a forex traders is going to be a successful one or join to the majority of traders and fail. I am going to explain further what exactly is spread and why it is important in an other blog post. Well, all right, definetely spread is very important so what are the top forex brokers with the lowest spread?
First of all, I would like to put forward that when you pick a forex brokers for your trading, low spreads should not be the only or primary criteria. Instead it should be in the bowl of criteria in addition to regulation, leverage, available instruments, funding and withdrawal options.
It is hard to give a crystal clear answer to the question but I can say that forex brokers that offer ECN forex accounts are the right ones to try for those traders who are over sensitive about spreads. I have explained here what an ECN forex account.
As an example, Pepperstone’s Razor account and IC Markets’ ECN account have tighter spreads compared to standart forex accounts. Perhaps, it has not occured to most of you but your account size could also play an important role for the spreads that you are seeing on your forex account in a way that it gives you a bigger bargaining power if you demand lower spreads.
Commission in Forex Trading
A very critical point to note about ECN accounts is the commissions. Forex brokers dont make quotes up themselves, they receive them from a liqiudity provider with certain spreads and in order to be able to make money, they have to widen the spread.
On the other hand, on ECN accounts, you receive the raw spreads which means that broker passes the quotes directly from liqiudity provider to you. Thus brokers charge commissions on ECN accounts to profit and in some cases those commissions could easily eat up your profit. So I recommend you to make sure that the commisions would be bearable for your trading strategy.