Trading forex is a lucrative venture once you find your footing as a trader in the volatile currency market. But the first step that one needs to take to enter the forex market is finding the right forex broker. A forex broker needs to be chosen after considering a number of aspects that are relevant to your trading experience. This includes the functionality of the platform, trading conditions offered and the customer service you get from the broker. Spreads are an integral part of the trading cost in forex and would be stated as a part of the trading conditions by most forex brokers. Tight spreads or narrow spreads are considered to be a favourable condition for trading.
Choosing the right broker can reduce your trading cost to a great extent and today we will give you some tips for choosing a low spread forex broker and also give you a list of 5 forex brokers.
- Look for Brokers Who Provide ECN Execution: The number of ECN brokers have significantly increased in the past few years. ECN is the acronym for Electronic Communication Network which describes the way in which the broker connects its traders to the global forex market. Typically ECN brokers offer best prices for trading with various currency pairs which makes them a popular choice among retail traders.
- Check the Broker’s Spread on Major Pairs: The spreads charged on major pairs like EUR/USD will be a good indicator for choosing a low spread broker for forex trading. The major pairs have lowest spreads due to their high trade volume and liquidity. You can compare different broker platforms based on the spreads on major pairs and opt for the ones that charge the thinnest spread on average.
- Look for Brokers Who Provide Floating Spreads: There are some brokers who charge fixed spreads based on the currency pair you trade with. But the top brokers mostly offer floating spreads or they offer both options for clients to choose from. You may think that fixed spreads will be good to minimise the trading cost but floating spreads tend to be a better option as you get the benefit of nearly zero spreads on major pairs if you choose to trade major trading sessions.
- Check Other Costs Like Commission Charged: Brokers usually state the spreads in the number of pips as that is the unit of measurement for tracking price movements in currency pairs. But spreads aren’t the only cost that you need to bear for trading. The broker may also charge you commission per lot for executing your trades. You need to consider the commission alongside spreads for choosing a cost effective broker.
Top 5 Low Spread Forex Brokers
- Minimum deposit required – $10
- Funded accounts available with up to $200k funding.
- Provides MT4 and MT5 as trading platforms.
- Tight spreads as low as 0.1 pips.
- STP execution.
- Up to 500x leverage available.
Click to read the full Sagefx Review
2. B2B Broker
- Regulated by multiple authorities including FCA & CySEC.
- They provide brokerage solutions by offering liquidity and technological assistance.
- They only cater to the needs of institutional and corporate traders.
- They offer white label solutions based on MT4/MT5.
- They do support social trading and also offer PAMM/MAM accounts.
- Clients can also open a cryptocurrency exchange obtaining their tech-package.
Click to read the full B2Broker Review
- Regulated by the Financial Services Authority of Saint Vincent & the Grenadines.
- Can start trading with a low minimum deposit of $10.
- Provide MetaTrader 4 as a trading platform along with apps for mobile trading.
- Offers different account types to choose from based on trader’s requirements.
- Can trade instruments like forex, indices, commodities and stocks.
- Allows copy trading.
Click to read the full MTrading Review
- Minimum deposit – $20
- STP execution
- Offers MT4 platform for trading.
- Max leverage up to 1:500.
- Low spreads around 1 pip typically.
- Spreads starting from 0.2 pips on majors.
- Up to 1000x leverage.
- 100% credit bonus.
- Minimum deposit – $100
So, these are the top 5 low spread forex brokers that you can consider for minimising your trading cost. We have already mentioned the tips and things you need to keep in mind while choosing a low spread broker for trading. Don’t forget to try their demo trading account first as that gives you a preview of the trading environment without risking any real money in the first place. You can proceed with live trading if you find the broker’s services and trading conditions to be satisfactory.