To forex in general, spread or commission is the main income for many brokers and also the cost that traders pay for their transactions. In consequence, traders tend to search for brokers with lowest spreads to trade with.
However, before I come to the list of 5 lowest spread forex brokers, I would like you to understand some definitions. If you’re sure that you understand this field clearly, you can move on to the list down below.
- Something you need to know:
- Types of traders
There are two types of trader in forex market: Scalpers and long term investors.
To scalpers, they do trading with a broker in a short time and move on with another. They earn only some pips per order and pay commission or spread as transaction fee. Thus, they are people who need to find brokers with low spread.
To long term traders, their accounts are stable and almost fixed with certain brokers. The cost they pay is counted on how much they get, usually 2%. Nevertheless, long term investors can win hundreds of pips so the cost isn’t a big deal. The real cost to them is swap. As a result, they don’t need a broker with low spread but low swap.
- Types of brokers
There are Market Maker and STP brokers whose income is mainly from spread. In their quotes to customers, they have to raise the spread up and benefit from that, but no other charges to traders. In general, their spreads are always higher than other types.
ECN is another type of broker whose profit comes from commission. In another word, instead of charging higher spread, they provide clients real quotes from banks. However, to gain for themselves, they charge clients commission as transaction cost.
- Spread and commission
From my definitions about brokers above, I think you can understand what is spread and what is commission somehow. We can say they are both income to brokers. But spread is difference between BID and ASK, and customers are charged without knowing exactly how much, while commission is a separate charge by brokers.
In final, after you are sure about what you are dealing with and understand what you need exactly to win this business. You can find my list here, they are 5 non-ECN brokers with lowest spreads (I do not put ECN into the list because their spreads are always the lowest, nothing can compare)
Before clicking in any name, you should take a look at the updated table for spreads below:
|Broker Name||EUR/USD spread||Regulation|
|Exness||0.7 Pip (Classic account)||CySEC, FCA|
|Hotforex||1.1 Pip (Premium account)||Vincent|
|FBS||1.1 Pip (Standard account)||Belize|
|XM||1.7 Pips (Zero account)||FCA (UK)|
|FXTM||1.7 Pips (Standard account)||Belize|
|Forex.com||1.8 Pips||NFA (US)|
|FxPro||1.7 Pips||FCA (UK)|
So, I think you will raise a question why some brokers offer much higher spread than other or some will definitely pick Exness. I gave you the list and now I will tell you which in the list is good for whom.
XM or FxPro are UK regulated brokers. Thus, they are controlled by UK legislation and their licenses are certificated there, too. So they are trustworthy to the Africa or European people. They’ve got offices and live customer service in the town then you could have the best support. The spread they offer seems higher than other because they are following an expensive regulations and that regulations are protective for certain groups.
Exness has offices in many countries but mainly Asia and websites with 18 languages. As the broker with lowest spread and commission, Exness are the best choice for any Asian scalpers. Exness is recommended for European, too because it’s regulated by CySEC.
You can see a rule here: find a local broker. A good broker should provide you the lowest spread if you are scalpers. However, there are many other reasons to choose one, not only spread or commission. Something you should consider more such as the clarity, payment systems, customer services, leverage… so on. Check brokers with the best trading conditions.
There is not only way to come successful. Even it is Exness or XM or any other with low reputation but you find it fit the way you trade the best, it’s the most suitable. The list is easy to write down, but select some from the groups will depend on how you are doing.
Brokersguru proudly brings you this article. “The lowest spread brokers” is written by Mr. Bruce Kovner, an expert in forex trading for many years. Mr. Kovner chooses Brokersguru, which is in Thailand, due to its dedication and commitment to give forex traders trusted, safe, and professional knowledge about forex brokers.