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Forex News are updated by Thomas Johnson - a trader from USA

10.09.2018.

SPENDING 5 MINUTES ON TOP 5 LOWEST SPREAD FOREX BROKERS

BRKV - Forex trading is one of complicated job. It requires traders to have essential skills in choosing a suitable broker. One factor to pick out a good broker which I want to mention today is lowest spread forex brokers. I know that many traders  are wondering if they should brokers which support their business. Recently, there are many of my subscribers sending me emails asking: “Who are lowest spread brokers?”

In this article, I also answer the question. I hope that this article provide you with useful information and this is a solid basis in a fair way of business.

Here are top 5 lowest spread brokers:

  1. Exness.com
  2. Hotforex.com
  3. FBS.com
  4. XM.com
  5. FxPro.com

SPENDING 5 MINUTES ON TOP 5 LOWEST SPREAD FOREX BROKERS

1.  Some problems relate to spread

The difference between the Bid and the Ask prices is called spread. It represents brokerage service cost and replaces transactions fee. The higher the spread, the higher the transaction cost. Therefore, most traders want to trade with low spread brokers.

It should be noted that no all traders tend to like work together with low spread brokers because it depends on their campaigns.

a. What are the differences between Spread and Commission of 3 types of brokers

As you can see, xxx Maker, STP, and ECN are 3 types of traders favored all over the world. However, today I only correspondents with you about xxx Maker and STP because  main income of these 2 types is spread. On the contrary ECN brokers with main income is commission. If we discuss all traders, it is very long. You can check ECN brokers here to learn more.  When they get quotes from liquidity providers, they will add the transaction fee (spread) to those quotes (a process called Mash Up).

b.  What type of traders need low spread brokers?

If you are long term investor, don’t care about spread.

If you are scalpers, spread and commission are important.

Do you know why I said so?

- For scalpers, they open many positions in a short time ( less than 1 month) , so their main transaction cost are spread and commission. Moreover, they also earn just some pips per order, so they prefer to choose low spread and low commission brokers.

- For long term investors, because they keep their positions longer (over 1 month) , they earn some hundreds of pips per position. Their main transaction cost is swap so they make nothing of spread and commission. In fact, they only lose a maximum of 2% of their profit for spread. Sometimes, they have to pay up to 90% of their profit for swap. This is the reason why they prefer low swap brokers.

Remember! You have to work with trusted and regulated brokers.

c. Why US and UK brokers’ spreads are higher?

As I mentioned in some article before, regulations limit brokers some problems related to offering bonuses, program and spreads. They have to pay more for the regulation fee. That’s why they have to charge more spread and commission

US and UK are the 2 biggest forex xafss in the world, but their brokers are less competitive in term of transaction cost.

You observe the following table to see clearly about the spreads for EUR/USD of best forex brokers:

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)

From that the CySEC broker and Exness have the lowest spread. UK and US brokers have the highest spreads. Their spreads double that of Exness. Click to check spreads of Exness.

In addition, I did a research of hundreds of top forex brokers in the world, and I found that US and UK brokers usually offer higher spreads and commission than Australia and CySEC brokers. CySEC brokers offer the lowest spreads.

2. How to choose the best low spread broker?

Here are 4 conditions to choose the best low spread brokers:

  • Reliable brokers: That broker has licenses in your country. Of course, if they own a license from such famous agencies like: ASIC (Australia), CySEC (Cyprus), FSA (Japan), CFTC (United States), NFA (also United States), and FCA (United Kingdom), it is much better.

  • Local payment system. You should select brokers which invest local payment system like Exness which I am cooperating. You can see detail about Exness by clicking here. If low spread brokers only can deposit and withdrawal by Visa, Credit card, Neteller, and Skrill... you have to pay 2 - 4% of your total deposit amount as the fee for those international payment methods. This is a disadvantage you need to consider. This fee is so expensive for you.

  • Low spread and commission. You can read again the above section. Low spread and commission help you go up profit.

  • Good local supporters. This is one of important factors both beginners and experienced brokers. If you have any trouble in trading, please contact this department. They will deal with your problems instantly.

Sum up:

If you are ASIAN traders, Exness is the best brokers for Scalpers.

If you are Africa traders, XM and FxPro are the best.

If you are US traders, Forex.com is the best

If you are European traders, XM, FxPro and Exness are the best.

Read more : WHAT MAKES EXNESS CENT ACCOUNT BECOME THE BEST ACCOUNT FOR FOREX TRADING BEGINNERS?

Hey there, this is Fanara Filippo. I'm the author of this article and I'm currently collaborating with Brokerreview.net, or BRKV in short. My articles are mainly for forex traders from Thailand, Indonesia, India, Bangladesh, and South Africa.
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