Lowest Spread Forex Brokers For Major Pairs
On any trading platform, there are two prices for each financial instrument – the Bid and the Ask. When buying or going long, traders use the Ask Price, while the Bid Price is used for selling or going short. The difference between the Bid and Ask Price represents the spread. It is an income for the broker (fee), which is also a cost for the trader. Therefore, a lower spread would be much better for traders.
For most traders, Major Currency Pairs like EUR/USD, GBP/USD, USD/JPY, etc. are the best choice due to their liquidities. These pairs are known to be the most active currency pairs on the forex market, with more than 100 pips daily price movement. If you wish to trade with the lowest spread forex brokers for Major Pairs, the list below could be a great help for you.
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Why is spread important in scalping?
Scalping should only be used on an account with low spreads. If the EUR/USD bid price is 1.19610 and the ask price is 1.19620, then the spread of that pair is 1 pip, about 10 percent of a scalper's profit target if they intend to gain only 10 pips each trade.
If you aim for a few hundred or a thousand pips, one pip may seem minuscule. But that one pip can be a huge part of your trade if you only aim for 10-20 pips.
Continue Reading at Simple Scalping Strategy with EMA
How does fixed spread account operate?
A fixed spread account offers a constant or fixed spread on the markets, resulting in a slight price difference between the market and the broker's offered price. Fixed spread accounts are known for their stability, even during extreme market conditions, which is why they are termed "fixed." This stability reduces the risk of spread widening.
Continue Reading at Raw Spread Vs Fixed Spread: Which is the Best for Scalping?
Why do scalpers need low spreads?
A scalper can open and close 30 positions in a day. Say the broker charges a spread of 3 pips for every position, the profit average is 5 pips, the loss average is 3 pips, and the scalper makes 20 winning trades and 10 losing trades. The total profit and loss without the spread are:
(20 x 5) - (10 x 3) = 70 pips
If the spread is charged:
((20 x 5) - (10 x 3)) - (30 x 3) = -20 pips
The result is disappointing, right? Although they have made twenty profitable trades, the total profit/loss turns to minus once the spread is applied.
Continue Reading at The Secrets of Successful Scalping Strategy
Why spread is important for trader?
Spread affects the kind of strategies that a trader can use. For instance, scalping is a popular trading strategy in which traders open several trades throughout the day to make a series of small profits. However, if the spread is too high, it might end up consuming most of the profits made by the trader via this strategy.
The implication of this is that many profitable strategies are rendered useless when the spread is too high since the trader will only keep losing money.
Continue Reading at Spread Comparison: Exness Vs Tickmill
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