Brokers with no spread
What to choose – account without spread but with Commission deducted, or a regular sredovye account without a fee, read our article.
In recent years brokers have increasingly begun to see accounts with a zero spread, where spread is the Commission charged from the trading volume. In this account, they are slightly different from classic ECN accounts as in the last case will be charged and the spreads and Commission, but unlike the standard accounts, the spread here is very narrow from 0 pips. Let's see in what cases brokers no spread will be useful and when it is better to trade in a classical way without commissions.
What's better spread or Commission?
When you open the order to buy or sell, the transaction immediately goes negative, that is, you earn the spread. But there are no sredovye account, when, instead of the spread you incur a charge. Many traders believe that accounts with a zero spread is more profitable, but actually it is not. In fact you are subject to the average fee, which can be compared with a fixed spread. If you want to save on Commission, you need to look for a broker who offers accounts with a minimum Commission, but on them you would not notice the difference between spread and Commission. If you will be trading in a plus, you will not be afraid of no spreads, no Commission. Here you need to put the question otherwise: "What is the spread or Commission?", because depending on the style of trading you can have the account without a spread.
If you are a scalper
For scalpers without sredovye accounts will be easier. No need to wait until the price will come out of minus, you get a psychological advantage, which positively affects the profitability of the strategy.
If you care about accurate inputs
There are strategies where the most accurate inputs, especially when you trade with pending orders. Sometimes spread occurs early triggering of a pending order (stop orders) or naborfrom price does not reach limit orders and goes in the right direction, leaving you without profit. In this case, you will benefit from the account without a spread, so no need to count, set the pending order and wait, when they will work.
If you trade exotic currency pairs
Exotic currency pairs the spread is much higher than the fundamental, while the size of the fee is the same for all the trading tools so better to use accounts with a zero spread. Usually, however, without sredovye account apply only to the major currency pairs, so this recommendation does not always work.
If you trade the major currency pairs
For the major currency pairs all the way around – more profitable accounts with floating spread. If you take the most popular currency pair EURUSD, the Commission will be more than the spread.
Thus, if you are a scalper or trade with pending orders inside of the day, choose brokers with no spread, in other cases it would be profitable to trade on accounts with minimum spreads.