As a forex trader, there is little doubt that one of the key things you will be considering when choosing your forex broker in 2020 is the spread. The spread in forex is one of the most important things to take into account when you are entering the market.
With that in mind, we have charted the brokers with some of the best-fixed spread offers in the industry for you to select from.
Top 10 Fixed Spread Brokers
In no particular order, here are some of the best we have found in the forex market:
What is Spread
The spread when you are engaged in forex trading is very simply the difference between the bid and the ask prices of a forex currency pair or another trading market. This spread is sometimes the way in which almost all of the top forex brokers make a marginal profit through having their own small markup, although they remain as competitive as possible.
What does fixed spread mean?
Thinking about the spread in forex, you will typically encounter 2 types. Fixed spreads, and variable or floating spreads. The latter of these is usually more common and means that the spread can change (or float/vary) depending on the demand or volatility of a market. As mentioned above, this can provide some opportunity for a broker markup.
Fixed spreads on the other hand, as the name would imply, do not move. These are set by the broker and will almost never change, at least not in any short frame of time. Brokers who used fixed spreads can also be termed as a market maker broker.
Floating spread vs fixed spreads
Looking at the spread in forex from a trader perspective, you may wonder which one is best as a forex trader. This simply depends on the market and on the moment. Some may say that floating spreads tend to be averagely lower, although this is not always the case and the fact they can change does provide you as a forex trader with some level of unpredictability.
Many in the forex trading industry like to eliminate this uncertainty and so they choose to deal with what may be a marginally higher fixed spread but they can understand the exact cost of their trade with ease.
With that said, when choosing a market maker broker for forex trading, you are relying a lot on the integrity and reputation of that broker to set the fixed spread in a fair and reasonable manner. Thus, you should always try to go with a very well-regulated broker like all that we have listed above. If you can do this, then in the long-term, depending on your forex trading style and the movements of the market itself, you may well find that you can save money and trade in a more economical manner with the fixed spread in place.