When looking into trading Forex, you always end up reading about the term ‘fixed spreads’. Most fx brokers offer floating spreads depending on market fluctuations and instrument volatility. However, a lot of brokers offer accounts with fixed spreads under specific trading conditions.
Fixed Spreads Forex Brokers List
MAS, JFSA, DIFC
What is spread?
A spread is the term used to describe the difference between a currency pair’s asking price and bid price. A low spread is one in which the prices do not differ greatly, compared with a high spread, where there is a greater difference between the two figures. Trades with a low spread incur fewer costs than those with a high spread. Spreads can change frequently depending on market activity. And, given that the whole point of the trade is to make a profit, low spreads forex trading can be more financially beneficial. In the market, spreads can be variable or fixed.
So, what of fixed spreads in Forex trading? The clue is in the name. Fixed spreads are spreads that do not change, despite the conditions in the market. These fixed spreads can help traders to know what their bottom line is so that they can calculate profits no matter what the volatility and liquidity in the market is. This enables Forex traders to develop their strategy in a simple way. There’s a clearer transparency in prices and therefore an assessment of cost that is much more predictable even before trading begins.
The Advantages of Fixed Spreads
Unlike variable spreads, where the spread fluctuates continuously, fixed spreads Forex brokers set their spreads so that they do not change depending on the market conditions. When you trade with tight spreads what you are offered is what you will end up paying. Let’s have a look at the overall advantages of fixed spreads Forex brokers to see if you can find the best fixed spread Forex broker for your needs:
As mentioned above, with a fixed spreads Forex broker, you know what you are going to have to pay straight away so transactions are always clear and profit calculable.
The cost of trading can be reduced given that you won’t be faced with any nasty surprises. The costs of transactions can be budgeted for, which can help to improve the way that you manage costs throughout your Forex trading journey.
Easier trading of news
Fixed spreads are perfect if there are volatile conditions in the market. This can mean that, whilst quieter times may benefit variable spreads, news events causing market fluctuations and creating a volatile market works well in conjunction with fixed spreads.
As a result, traders can trade on news in the same way with any other conditions in the market. It means that trading is less confusing as there is less fluctuation between bid and ask prices.
Short-term strategies can be more effective
Making many trades in a short space of time is easier when you are using fixed spreads Forex brokers. The gains may be small, but there is a greater level of transparency within the prices.
Having read all about fixed spreads in Forex trading, it’s important to know that there are many brokers with fixed spreads. To help you find the best fixed spread Forex broker for you, we’ve come up with a list above.