Are you looking for the lowest spread Forex Brokers to find a cheap trading solution?
You’re in the right place.
We have collected for you the 10 best major Forex Brokers with low spreads, with different features and functionality so you can choose the one that best suits your needs.
|Best Low Spread FX Brokers||Minimum Deposit||Spread Type||Avg. EUR/USD Spreads|
|IC Markets||$0||Floating||0,10 pips|
|FP Markets||$100||Floating||0,45 pips|
|Vantage FX||$100||Floating||0,50 pips|
|Fusion Markets||$0||Floating||0,09 pips|
Table of contents
Top 10 of the Best Forex Brokers with Low Spread 2021
Here’s our ranking.
What is a low spread in forex?
The spread is a mark-up commission applied by a forex broker to a forex pair.
Considering that the forex market average spread is between 1 and 3 pips on major forex pairs, a low forex spread is any spread value below that average.
Nowadays, the best low spread forex brokers offer extremely tight spreads. In fact, the lowest spread available on forex starts from 0 pips.
Are low spreads worth it?
Since the spread is effectively a commission from the broker, then a lower spread is always better. It can also be very necessary if you want to employ trading strategies such as scalping.
With that said, while a lower spread is always better, just make sure you examine the broker offering closely to avoid any other types of commission in place of a spread.
How are forex spreads calculated?
You will very often hear mention of spread in forex, and it is a key figure in determining your trading cost. The spread is the difference between the bid/sell prices of an asset.
This price difference is calculated in “pips” (Percentage In Points), but how is it calculated exactly?
1 pip is a 1 point movement in market value based typically on the fourth decimal place of a currency pair.
For example in the case of EUR/USD:
- bid/ask of 1.08335/1.08340 (0.5 pips spread)
- bid/ask of 1.08335/1.08345 (1 pip spread)
- bid/ask of 1.08335/1.08485 (5 pips spread)
JPY Forex pairs: The exception to the rule
The Japanese Yen (JPY) doesn’t follow the same rules. Spreads on JPY Forex pairs are measured on the second decimal place instead of on the fourth.
Here’s how to calculate the spread on USD/JPY:
- bid/ask of 110.099/110.109 (1 pip spread)
- bid/ask of 110.102/110.114 (1.2 pips spread)
- bid/ask of 110.094/110.108 (1.4 pips spread)
Forex spreads and commissions per lot: what you should expect?
In many cases, where you may see a regulated forex broker offering a 0 pips spread, what they are in fact offering, is a spread that starts from 0 pips. This is still excellent although you should be prepared for it to vary depending on the volume, and volatility of the forex market at any given time. This does mean that it could sometimes be significantly higher so it is something to look out for.
Since the spread is the main revenue for a broker, you should also take care to note any commission that may apply to low spread, or zero spread trading. If such commission does apply, this will typically be calculated on a per lot ($100,000) of currency traded basis and is usually below $5 depending on the market.
How to estimate Forex Trading fees when opening a trade
Choosing a forex broker with the best spreads to offer you is one thing, but you also need to consider, and be able to estimate how much this spread is actually going to cost you. Also even though a broker may have the lowest forex spreads, you should also be mindful of any commission which is in place.
Let’s take a closer look at exactly how you can calculate currency trading commissions easily:
So, let’s take an example. The lowest spread forex broker you can find is offering a spread of 0.1 pips. This number translated onto a currency pair price would take effect as 0.00001.
This means that you could be looking at a situation for example, where the bid/ask would look something like, 1.08335/1.08336.
Here you can see the 0.1 pip spread has moved the ask price up to 1.08336. With a higher spread, of course this price will climb further in the same way.
Translating this number into an actual percentage, and real cash value shows us just how small it really is. In this example case, a 0.1 pip spread is equal to just 0.00092% (0.00001 / ask price), or $0.92 per standard lot traded.
Forex commission per lot
Another point you need to consider when looking at forex brokers with low spreads and low deposit minimums, is to double check any commission per lot charges they have in place.
This typical commission charge, even for brokers with the lowest forex spreads, is usually around $7 per lot. Using this as our benchmark, it means that if you open a position for 0.5 standard lots, you will have a commission of $3.50 on opening. This is one way to charge the fee which is sometimes referred to as “per-side, per lot” commission.
In other cases with some brokers you may see commission written as “round turn”. In these cases, a round turn commission of $7 means $3.50 on opening of the trade, and $3.50 on closing. These are important details since you need to check beyond just the lowest forex spreads with all brokers.
Best low spread brokers for scalpers
Finding the lowest spread forex broker is great for many. For many though, such as day trading forex traders like scalpers, a forex broker with low spreads, and low commissions is not quite enough.
Scalpers will ideally prefer forex brokers with low spreads and low deposit of course, but they will also need fast order execution, and the ability to harness leverage to make money with their style of trading which relies on a high number of trades.
With that in mind, you should remember that within the EU and UK, as well as under ASIC regulation, the highest leverage available to retail traders from any regulated forex broker is 30:1. Among these brokers, one regulated forex broker offering high leverage is IC Markets.
They, along with some others that we have mentioned in our high leverage forex brokers top 10, can offer 500:1 leverage to some traders outside the EU, UK and Australia. There is also a higher leverage available from many who also provide the lowest forex spreads if you are a professional trader in these countries.
There are many good brokers for scalping, and among the best forex brokers for scalping in the world there’s VantageFX. An Australian firm regulated worldwide, which is also one of the best Canadian forex brokers.
Which broker offers the lowest forex commissions per lot?
Finally, as we mentioned, already, it may not be enough to just select the broker with best spreads. Let’s take a look then at a top broker choice with the lowest forex trading commission.
This broker is FXTM with their ECN account. This account charges traders just a $4 round turn commission. As explained in our example above, this means you pay a $2 commission on opening, and a $2 commission on closing a trade. This is great value in the industry.
They are also a top choice when it comes to providing the lowest forex spreads. These start from only 0.1 pips which is very competitive. Again, the trusted MT4 and MT5 platforms are available for you to trade with, and the minimum deposit on this account type is $500.
Forex Brokers with Zero pips spread: Which is the best one?
If you are looking for the best broker with a truly real zero spread that is fixed, then the FBS Fixed Zero Spread account type may be perfect for you. This remains fixed at 0 pips spread and does not increase though it is available only under IFSC regulation in Belize, and so, not accessible to Europeans regulated within Europe. The only downside of this account type, is the huge $20 commission per lot traded.
With that being said, if you plan to use a commission-only trading strategy, then this currency trading account is the one you have to look for.
Forex broker with the lowest Fixed Spread
Of course, we are all looking for the broker with the best spreads possible on the market. When it comes to the broker offering the lowest fixed spread in the market currently, that is AvaTrade. They offer CFD trading on forex from a fixed spread of 0.9 pips with no commissions per lot at all to worry about. If you check our example above, you will see just how good a deal this is.
You can open a forex trading account here with a minimum deposit starting at only $100. This is a great combination then from AvaTrade being one of the forex brokers with low spreads, and low deposit minimum that you can choose from.
They also make available a great range of the top forex trading platforms including both MT4 and MT5. For more in-depth on this broker, and more great choices with the lowest forex spreads, check our Top 10 Brokers with the Lowest Fixed Spread.
Forex Brokers with the Lowest Spreads Comparison
There are a lot of forex brokers in the industry, and many of them offer low spreads. Here you can find a list of brokers offering tight spreads, but if you’re interested in ECN brokers, we have written an article to help you choosing the best ecn broker for you.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money
|Broker||Min. deposit||EUR/USD Avg Spread||Fee/lot|
|IC Markets||$0||0.10 pips||$6|
|FP Markets||$100||0.09 pips||$6|
|Vantage FX||$200||0.50 pips||$4|
Low Spread Forex Brokers FAQs
What are the best Low Spread Forex Brokers?
The best low spread forex brokers are: 1. Pepperstone – 2. IC Markets – 3. XM – 4. FxPro – 5. FBS – 6. FXTM – 7. FP Markets – 8. Vantage FX – 9. OctaFX – 10. HotForex
What is the lowest spread in forex?
The lowest spread in forex is 0 pips, and it’s usually offered by ECN-STP brokers. When spreads are this low the broker also charges a small fee per lot traded, which is usually around $3.
Do Different brokers have different spreads?
Of course: even though the minimum spread usually ranges between 0 pips and 1 pip, the average spreads may differ depending on a number of factors, including the broker’s liquidity providers