Best Low Spread Forex Brokers
A forex broker, otherwise known as a currency trading broker, deals with trading foreign currency. The forex market is widely used for both beginners and experienced traders, since it offers a wide variety of platforms with competitive spreads.
What is a Low-Spread Forex Broker?
Spreads are important for a forex broker to be familiar with because it will mostly determine the cost of the currency transaction. The spread is the difference between the ask price (the price of the currency pair that the broker is willing to sell) and the bid price (the price of the currency pair the broker is willing to buy). A spread is measured in pips, which is the smallest unit of measurement for a currency pair. In solid numbers, it is the fourth decimal place in a currency quote.
The lower the spread is, the lower the cost of that currency trade. The spread will change according to market conditions, liquidity, and volatility of the spread. Even the time of day can affect the spread; roll-over times have less liquid cash flow and therefore, usually, a wider spread.
Of course, keep in mind that a low spread may not be as amazing as it looks. A broker guaranteeing you a low spread may be making up the difference in other areas, such as a high minimum deposit or charging a high commission. It’s also a good idea to pick brokers in the same country to minimize complications. Basically, if it looks too good to be true, then it probably is. With that in mind, here ten good options to consider for low-spread forex brokers.