Zero spread brokers can be the best way to reduce trading costs. However, traders should take other factors into consideration, such as low deposits. By combining both aspects, it's possible to spend less money to start trading.
Spread is one of the most important factors when it comes to choosing the right brokerage. Most traders believe that by choosing the lowest spreads available, they can suppress their trading costs. There are a lot of brokers offering low spreads nowadays, so the options are really unlimited. In fact, there are a good number of brokers offering zero spreads. There are several reasons why opening a zero spread account has a lot of benefits.
Why Zero Spread Account is Recommended?
Some brokers might call their zero spread account a raw account or a zero account. The idea is to offer traders the lowest price for all instruments involved and the broker will not add any markup on the price. The results are extremely low or even zero spreads.
For example, a trader wants to trade the EUR/USD, and the pair is currently at 1.3404. Through a zero spread broker, the trader will get that exact same price without any mark-up. This is different from a standard account where the price tends to be more expensive compared to what the market offers.
In exchange for the zero spread, brokers will charge traders with commission fees for each trade executed. Some charge fees for each opening and closing trade ("per side"), while some others may charge fees after one full round-turn.
Zero spread brokers are the best for traders who want to cut down their trading costs, scalpers, and new traders with small capital. That being said, traders should be careful on other trading hidden costs they most likely overlooked. Aside from commission fees, they also need to consider how much the initial deposit costs.
Why are Deposits Important?
Initial deposits are a must if you want to start trading with a broker. However, not all brokerages have the same requirements. Some set large initial deposits to open an account, while others do not. Brokers with low minimum deposits are great for traders who are just starting out. They can facilitate quick and easy access to the financial markets but won't overcharge traders with enormous starting capital. After all, new traders most likely will trade small positions, so they are not too keen on spending a lot of money on the market.
Aside from new traders, a broker with low deposits is also great for traders who want to test several markets. They can spread their money across multiple assets such as currency, commodities, indices, and many more. Not to mention, brokers with low deposits usually accept smaller order sizes. This is great for traders who don't want to spend too much cash. However, choosing a good low deposit broker may not be as easy as it sounds. Some of them might have hidden fees or they might be scams. So it's important to check their regulations and legitimacy.
Zero Spread Broker with Low Deposits
To get the best trading price, traders can apply to a low spread broker that has low initial deposits. The combination of both features can help traders reduce the cost of trading. That way, they can enter the market even though they don't have a lot of money to begin with. There are a number of brokerages offering both raw accounts and low deposits, but not all of them are trustworthy. Here are some of the best zero spread brokers offering affordable deposits that live up to their popularity.
1. IC Markets
IC Markets is an ASIC-regulated broker that is known to have one of the best trading prices. This broker has two MetaTrader account types, which are the standard account and the raw spread account. The raw spread account means traders can enjoy spreads from 0.0 pips. But there is a commission fee of $3.5 per lot per side. IC Markets also offers raw spread accounts in cTrader, in which the commission fee costs only $3 per $100,000 trading size.
The initial deposit for IC Markets raw accounts is $200. This is considerably more affordable than other zero spread brokers. Traders can also enjoy leverage up to 1:500 to have more power in the market. There are Islamic accounts available for traders who want to further reduce their trading costs. All trading styles are allowed in IC Markets so traders can scalp, hedge, and diversify their trading without any restrictions.
IC Markets is an online forex broker operating under the company of International Capital Markets Pty Ltd. Traders under the Australian jurisdiction are provided with the trading service of IC Markets AU that is headquartered in Australia and licensed by the Australian Securities and Investments Commission (ASIC).
On the other hand, non-Australian traders who open an account in this broker are registered under IC Markets SEY that is based in Seychelles, and regulated under the Seychelles Financial Services Authority (SFSA). The dual operation is a result of the relatively new rules from ASIC that prohibit their regulated broker to offer trading services outside Australia.
Classified as an ECN broker, IC Markets provide clients with MetaTrader 4, MetaTrader 5, cTrader as platform trading options. This broker also follows market trends to include Cryptocurrencies as one of its products, enriching its already wide selection of trading assets that include Currencies, Indices, Metals, Energies, Softs, Stocks, as well as Bonds.
The minimum deposit in IC Markets is in the middle range compared to other ASIC-regulated brokers, as it reaches $200 for every client. Market analysis materials are also prepared regularly for trading insights on IC Markets's official website, proving their competence to serve their traders with important contents created by market experts that work specifically for them.
For payment methods, IC Markets allows funding and withdrawal via wire transfer, credit card, PayPal, Skrill, Neteller, FasaPay, UnionPay, as well as Bitcoin via BitPay. The more interesting aspect from this broker is its multi-base currencies that include USD, AUD, EUR, GBP, SGD, NZD, JPY, CHF, HKD, and CAD.
As the trading technology in IC Markets is highly equipped with co-located servers and extremely low latency (especially on cTrader), the broker is widely known for its capability in hosting traders with the special needs for high-frequency trading as well as scalping.
To sum up, IC Markets is a fitting destination for active traders looking for a well-regulated broker. IC Markets is also flexible in terms of base currency and payment methods, signaling their commitment to welcome traders beyond their home country. As of late 2019, IC Markets provided their website in 18 international languages including English, Korean, Indonesian, French, Spanish, Italian, Malay, German, and Chinese.
2. Tickmill
Tickmill has three account types. The first one is the classic account, or what most brokers call a standard account. The second type is a zero spread account that they call a pro account. This one offers spreads starting from 0.0 pips and a minimum deposit of $100. Traders will be able to gain access to leverage up to 1:500. The third one is a VIP account that has a leverage maximum of 1:500 and 0.0 pip spreads. However, to open a VIP account, traders should have a minimum balance of $50,000.
Tickmill is an award-winning global ECN broker, authorized and regulated by the Financial Conduct Authority (FCA) in the UK, CySEC in Cyprus, and the FSA of Seychelles. Founded in 2014, it offers its retail and institutional clients various trading services with a prime focus on forex, stock, commodities, CFDs, and metals.
For traders who prioritize the value of spreads in broker selection, Tickmill provides excellent services with low spreads, starting from 0.0 pips.
The London-based company has a mission to provide clients with the best possible trading environment, so clients can focus on trading and become successful traders. One way to reach its mission is to offer a fast-execution of 0.15s. With this facility, it's no wonder that Tickmill gets the 2019 Best Forex Execution Broker award by the CFI.co Awards. Also, Tickmill received the achievement as Best CFD Broker Asia 2019 by International Business Magazine, the Best Forex Broker Asia, and the Most Transparent Broker 2019 by Forex Awards.
After registering in Tickmill, traders can choose the most ideal asset among 60 currency pairs that they can trade. If traders aren't sure yet to open a real account, Tickmill recommends learning to trade through a demo account.
There are also educational features such as Webinars, Seminars, Ebooks, and Video Tutorials. All of these facilities can be used by traders to increase knowledge about trading and the financial market as a whole. If traders already have enough knowledge, they have a greater opportunity for earning profit consistently.
For traders registered in real accounts, they can choose between provides three types of accounts, including Pro Account, Classic Account, and VIP Account. Traders can open positions with a minimum order of 0.01 Lots. This applies to all types of accounts.
The company provides recommendations for traders who are still confused when choosing an account. For example, for novice traders, Tickmill encourages clients to choose a Classic Account. It offers optimal conditions with fast order execution while enabling traders to use virtually any trading strategy. Additionally, the account is trade commission-free so traders only pay the bid/ask spread. Other than the 3 main accounts above, Tickmill also provides an Islamic account (swap-free).
The downside is, trading with Tickmill will only enable traders to use MetaTrader 4 as their offered trading platform. Although not much if compared to other brokers, the Tickmill platform provides a user-friendly and highly customizable interface, accompanied by sophisticated order management tools to help traders control positions quickly and efficiently.
The convenience of trading on Tickmill is enhanced by the existence of One-Click EA integrated on MT4. Traders will get Stop Loss and Take Profit calculations automatically. On top of that, Tickmill provides a VPS hosting for automated traders that can't be bothered with technical problems such as troublesome internet connection.
They offer several third-party research solutions, including Autochartist, which is a popular pattern-recognition software that uses automated technical analysis to make forecasts and generate trading signals. Autochartist is available both in Tickmill's web portal and as a platform plugin for MetaTrader 4.
As a Tickmill client, a trader can deposit and withdraw with a variety of payment methods, including Visa, Mastercard, bank transfer, and Skrill. Tickmill accepts deposits and withdrawals in 4 currencies, which include USD, EUR, GBP, and PLN.
Overall, Tickmill is a competitive broker in spreads and provides a safe trading environment with its regulated entities in three different jurisdictions. Although their trading platform is not outstanding, the analytical tools they present to equip traders' needs are considered by retail broker standards.
3. FP Markets
FP Markets' zero spread account allows traders to enjoy spread starting from 0.0 pips. The minimum opening balance in this account is AU$100. This broker uses ECN pricing for their execution type and charges a $3 commission fee per lot per side. Traders can choose between an MT4 and MT5 account and gain access to over 60 forex pairs, metals, indices, and commodities. FP Markets raw account also provides EA for traders who prefer automated trading instead of manual. This broker does not charge any deposit fees and will cover internal bank fees for all international deposits.
Keeping positions open overnight won't result in the overnight/rollover fee reducing your earnings, so you don't have to worry about it. FP Markets offers the most competitive swap rates in the industry by introducing Swaps Points in the form of a live swap rates list on the MT4 and MT5 platforms. Here are some examples:
- ACWI: -5.00 for long positions and -2.50 for short positions.
- ADAUSD: -20.00 for long positions and -20.00 for short positions.
- AGG: -5.00 for long positions and -2.50 for short positions.
4. HYCM
HYCM zero spread account lets traders enjoy spreads from 0.1 pips with a minimum trade volume of 0.01. Minimum deposits for this account are $200, quite low compared to most brokers. Aside from those, there are a couple of other factors to consider when you are about to open an account in HYCM. Traders can use credit or debit card deposits as well as bank transfers and electronic wallets with brokers. There will be no deposit fees charged for trading with HYCM. However, some traders might find depositing money with this broker is not user-friendly compared to similar brokers.
Formerly known as HY Markets, HYCM is a forex broker headquartered in London, UK. First established in 1977, this broker now has been regulated by the FCA (Financial Conduct Authority), the UK's trustworthy and reputable regulatory agency for more than 20 years. Besides, HYCM has also been regulated by other reputable agencies like CIMA (Cayman Islands Monetary Authority), CySEC (Cyprus Securities and Exchange Commission), and DFSA (Dubai Financial Services Authority).
Regulated by world-renowned financial regulators as well as having representations in the United Kingdom, Hong Kong, Cyprus, and Dubai, clients who open an account in HYCM can rest assured they are trading with a solid and secure company that excels in delivering one of the best trading solutions.
As a part of Henyep Group, HYCM opts to provide wide access to various trading markets including currencies, stocks, and commodities. Besides, HYCM has accumulated a large collection of awards since its inception, including World Finance’s Best Mobile Trading Platform (2017) and Global Banking & Finance Review's Best Forex Broker, UAE (2017).
Its recognition as an industry leader has helped HYCM to be known as the best broker across the globe. With a long track record of its ability in providing an outstanding and trustworthy trading experience, HYCM offers clients everything they need to make well-informed trading decisions.
HYCM offers some excellent trading conditions for their clients, including great liquidity and low spreads, as well as delivering a super-efficient service. Those services are in line with their commitment to focus on fast execution and low-cost trading. Any trading conditions offered by HYCM is differed by the instruments being traded:
Forex
- Spread: starts from 0.2 pips
- Maximum Leverage: 1:30
Stocks
- Spread: starts from 18 pips
- Maximum Leverage: 1:5
Indices
- Spread: starts from 2.0 pips
- Maximum Leverage: 1:20
Commodities
- Spread: starts from 3.0 pips
- Maximum Leverage: 1:20
Since HYCM is intended to be a broker of the most updated technology, they strive to stay ahead of industry trends by adopting the latest technologies to fulfill their clients' evolving needs. HYCM provides both MetaTrader 4 (MT4) and MetaTrader5 (MT5) trading platforms, to assist traders from all skill levels, together with advanced technical analysis, flexible trading systems, and Expert Advisors, as well as mobile trading applications.
For those who are newbies to the forex field, HYCM has helped much by preparing lots of educational resources and comprehensive product offerings. There are some forex tutorials, trading strategies, forex ebooks, and beginners' courses. Trading in HYCM also provides some useful tools, including calculators, economic calendar, news, and market outlook. Those overall services are a good choice for investors of all kinds, from beginners to professionals.
Last but not least, HYCM also offers various convenient deposit and withdrawal methods through bank transfer, credit card, and e-payment (Neteller, Skrill). Although bank transfers can take up to 5 days to appear in the trading account, all other methods are instantly processed for immediate trading. Numerous currencies are accepted as base currency including US Dollar and Euro, as well as KWD (Kuwaiti Dinar), AED (United Arab Emirates Dirham), RMB (Chinese Yuan), and SAR (Saudi Riyal).
If you are looking for a reputable and trustworthy broker with whom to begin trading and invest your funds, HYCM is a good choice. As they are fully licensed and regulated, investors are guaranteed the security of their financial and personal details. The choice of user-friendly trading platforms makes HYCM a sensible selection for both novices and experienced traders.
5. Admiral Markets
Admiral Markets offers a zero spread account with spreads starting from 0 pips that are available for MT4 and MT5. The minimum deposit for this account is $250. There are different trading instruments traders can get their hands on, which include forex pairs, metal CFDs, cash index CFDs, and energy CFDs. The commissions for each instrument are varied, where forex & metals commissions start from $1.8 per 1 lot.
6. Exness
Exness is a great raw account broker to consider. This broker offers the lowest raw spreads starting from zero pips with no markups. They keep the commission pretty low up to $3.5 and promise no requotes due to their fast trading executions. Traders can access more than 160 instruments including forex, crypto, energy, and many more. Simply deposit a minimum of $200, traders can enjoy unlimited leverage that Exness provides. The best part is this broker also offers instant withdrawals 24/7 with 98% of withdrawals processed automatically.
The choice of broker is adjusted to the needs of each trader. If you are a trader who only needs a basic platform and trading features with the best attributes, then Exness can be your best choice.
Exness covers its lack of feature variations with other advantages like low spreads starting from only 0.1 pip. This is very suitable for traders who use scalping strategies (Scalper). Spreads on major pairs in certain account types can also be as low as 0.0 pip, depending on market conditions.
Not only that, but traders can also enjoy other advantages such as automatic fund withdrawals. Exness processes the majority of client withdrawals instantly, without manual checks; however, withdrawals may be subject tos depending on the payment provider or method of choice.
The safety of traders' funds is also guaranteed as Exness is one of the European-based STP/ECN brokers. Exness's ability to become an official partner of the Real Madrid soccer team for 3 years, starting July 2017, also provides evidence that the company has high solidity.
Deposits and withdrawals may be made 24 hours a day, 7 days a week. However, it is important to note that the company shall not be liable fors in processing deposits and withdrawals if suchs are caused by the payment system.
Traders do not need to worry about transaction fees when depositing and withdrawing. Exness doesn't charge any transaction fees to traders even though some charges may be incurred depending on the payment provider of choice. A variety of payment methods are provided for traders, including Wire Transfer, Bank Card, Neteller, Skrill, and many others.
The financial reports and metrics on the Exness website are audited quarterly by Deloitte, one of the four largest public accounting firms globally.
Moreover, Exness is one of the mote transparent brokers in the online trading industry. Traders can find out all information about this company on the website, such as trading volume, number of active clients, client deposits, company funds, and many more.
The platforms provided by Exness vary in MetaTrader 4, MetaTrader 5, Web, and Mobile platforms. This makes it easy for traders when trading on Exness, as they can also access Exness platforms anywhere and anytime.
Over the years, Exness has developed into a broker that attracts traders. Trader's trust is further enhanced by its compliance with financial regulations like the FCA and CySEC.
One measure of client confidence can be put on the trading volume. By December 2018, their clients' monthly trading volume reached USD348.4 billion and active traders around the world surpassed 50,342.
Through the program offered by Exness, traders also have the opportunity to earn extra income by becoming their partners. From the Introducing Broker (IB) program, partners can earn up to 33% spread commission from every new client that registers with them.
Additional income can also be obtained from Exness Partners. Traders can get a spread commission of up to 25% per transaction made by traders who register through an affiliate link.
When trading with Exness, clients can also make use of its free VPS hosting services. A VPS (Virtual Private Server) offers increased reliability and stability for traders as they can maintain their trades and expert advisors without interruption in the event of unexpected technical issues, such as internet or electricity downtime.
From the review above, it can be concluded that Exness is a favorite broker for traders because of low spreads and flexible account types. This condition is very suitable for traders with limited funds but is in need of more opportunities to get maximum profit. This broker is also well known for its maximum support on both new and existing partners.
Conclusions
Using a zero spread account can be a gateway to lower trading costs. That being said, it does not mean traders can overlook other aspects as well. After all, trading has a lot of hidden costs that a new trader might not be aware of, such as initial deposits. Some brokers might require huge amounts of deposits and this might be wasteful if traders want to trade small. So, finding a broker with low deposits can be a great way to reduce costs as well. Both spreads and deposits are important factors to take control of how much to spend in trading. Luckily, there are plenty of zero spread brokers that have low deposits these days.
Aside from spreads and deposits, there are several ways to choose the right broker according to the overall trading costs. Find out what else a trader should be looking for in order to reduce the cost of trading.
5 Comments
Mar 3 2023
What is the difference between zero difference and ECN difference. I mean, in the article, at the end of the article, it says that zero spreads have lower deposits and can also be very beginner friendly. Meanwhile, other accounts like ECN can be very unfriendly to newbies.
Besides, as a newbie in FORex trading, do I need to make sure that zero spreads is the best option for me to choose or start with a regular standard forex account? ? THANK!
Mar 3 2023
Paul: I think to choose between those accounts really depends on your trading style and what you're comfortable with. If you're into making quick trades and plan to do a lot of them, a zero spread account with commission fees might be the way to go since it can save you money in the long run. But if you prefer to hold on to your trades for longer periods of time and do fewer trades, a standard account with wider spreads but no commission might be better. There's an article that can help you decide which account is right for you. You can check it out here: Zero Spread VS Standard Account
The big difference between zero spread and ECN spread is how they're calculated and charged. You can read about that at here : Raw Spread ECN vs Low Spread Zero
Mar 3 2023
Several brokers such as ICMarket, FP Market, Exness, Admiral Markets, and HYCM offer zero spread features for accounts with lower deposits compared to other brokers. However, the required deposit may still be higher than accounts that offer only a few dollars up to $100. The article emphasized the importance of the deposit, but it's not entirely clear why brokers with zero spread features require higher deposits, particularly for the Raw Zero Spread account.
That being said, if you have more funds, a zero spread account can be a good option, especially for short-term trading like scalping and day trading.
Mar 3 2023
Gibson: As I know, Brokers that offer zero spread accounts usually require a higher deposit because they're more suited for experienced traders who can handle the risks. These accounts charge commissions per round turn, which can add up, and the spreads may widen during volatile markets, leading to potential losses. So, to be safe, you need to have enough money in your account.
On top of that, zero spread accounts require fancy trading platforms and technology to provide fast and accurate pricing, which can be expensive for brokers to maintain. That's why brokers need to ask for a higher deposit to make up for these costs, as mentioned in the article
Mar 3 2023
Okay, I understand the commission that is charged when you use a zero spread account. The commission for a zero spread account is charged by round-turn, which means it is charged when you enter the position and again when you close it. Essentially, you pay half the commission when you open the position and half when you close it.
On the other hand, the standard account or other accounts that have no spread are charged commission only when you close the position. Essentially, all accounts have commission, but I don't know which one generally has a higher cost.
When comparing the commission for zero spread and standard accounts, it is difficult to say which one is best and cheapest for a beginner trader. It depends on the individual trader's strategy and trading style.