TOP 5 LOWEST SPREAD FOREX BROKERS IN 2018. SEE FULL LIST HERE!

Recently, there are many of my subscribers sending me emails asking: “Who are lowest spread brokers?” I can easily list down 5 lowest spread brokers, but I am afraid that those who asked are not sure what they want and what they will do with my list. That’s why I am writing this article to help you understand every aspects of low spread brokers.

Spread is the difference between the Bid and the Ask prices. It is the transaction fee you have to pay for brokers or banks. The higher the spread, the higher the transaction cost. That’s why most traders want to trade with low spread brokers. However, not all traders want to trade with lowest spread brokers. The information below is my own experience. You cannot find anything like this anywhere else. So let’s read all this article to understand all.

What are the differences between Spread and Commission?

There are 3 types of forex brokers: Market Maker, STP, and ECN. For first 2 types, their main income is spread. That’s why their spreads are much higher than that of ECN brokers. When they get quotes from liquidity providers, they will add the transaction fee (spread) to those quotes (a process called Mash Up). For ECN brokers, they will provide the exact quotes that liquidity providers provided. Therefore, they have to charge commission as it is their main income.

So what are the differences?

– Main income of Market Maker and STP brokers are spreads.

– Main income of ECN brokers are commission.

– For ECN accounts, you were charged commission and spread also, but those spreads are nearly zero. The main fee you have to pay is commission.

There are 3 types of brokers. I cannot review all broker types here, because it will be too long. So I will list down 5 lowest spread non-ECN brokers, because the question is about low spread brokers. It means you want to know about Market Maker and STP brokers’ spreads.

CHECK THE BEST ECN BROKERS HERE.

Here are top 5 lowest spread brokers:

  1. Exness >>> Check details here
  2. Hotforex >>> Check details here
  3. FBS >>> Check details here
  4. XM >>> Check details here
  5. FxPro >>> Check details here

What type of traders need low spread brokers?

There are 2 types of traders: scalpers and long term investors.

Scalpers are traders who open and close many positions within short time. As usual, traders who keep their positions open less than 1 month are scalpers. Vice versa, traders who keep their positions open longer than 1 month are long term investors.

For scalpers, they open many positions in a short time, so their main transaction cost are spread and commission. Moreover, they also earn just some pips per order, so they prefer to choose low spread and low commission brokers.

For long term investors, because they keep their positions longer, they earn some hundreds of pips per position. Therefore, they don’t care about spread and commission, because they only pay a maximum of 2% of their profit for spread, but their main transaction cost is swap, because they keep their positions open for months. Sometimes, they have to pay up to 90% of their profit for swap. For this type of traders, they prefer low swap brokers.

Of course we all agree that the first condition to choose a broker is their credit. We only trade with trusted and regulated brokers. Then, the next criteria is the transaction cost.

So what type of trader are you?

If you are long term investor, don’t care about spread.

If you are scalpers, spread and commission are important.

Why US and UK brokers’ spreads are higher?

US and UK are the 2 biggest forex markets in the world, but their brokers are less competitive in term of transaction cost. I did a research of hundreds of top forex brokers in the world, and I found that US and UK brokers usually offer higher spreads and commission than Australia and CySEC brokers. CySEC brokers offer the lowest spreads.

Example:

Here are the spreads for EUR/USD of top forex brokers:

Broker Name EUR/USD spread Regulation
Exness 0.7 Pip (Classic account) CySEC, FCA
Hotforex 1.1 Pip (Premium account) Vincent
FBS 1.1 Pip (Standard account) Belize
XM 1.7 Pips (Zero account) FCA (UK)
FXTM 1.7 Pips (Standard account) Belize
Forex.com 1.8 Pips NFA (US)
FxPro 1.7 Pips FCA (UK)

As you can see, the CySEC broker, Exness, has the lowest spread. UK and US brokers have the highest spreads. Their spreads double that of Exness.

Why US and UK brokers have higher spreads?

Because of the disadvantages of their regulations. US and UK regulations don’t allow them offer high leverage or bonuses, and they have to pay more for the regulation fee. That’s why they have to charge more spread and commission.

If you are ASIAN traders, Exness is the best brokers for Scalpers.

If you are Africa traders, XM and FxPro are the best.

If you are US traders, Forex.com is the best

If you are European traders, XM, FxPro and Exness are the best.

How to choose the best low spread broker?

Again, only scalpers should choose low spread brokers. If you are long term investors, swap is more important.

But there are a dozen of low spread brokers, so which one is the best for you?

Here are the conditions to choose the best low spread brokers:

  • Regulated brokers. If that broker was regulated in your country, choose it. If there is no broker regulated in your country, choose the trusted and lowest spread broker.
  • Brokers who have local payment system. Some low spread brokers don’t have local payment system. Traders only can deposit and withdrawal by Visa, Credit card, Neteller, and Skrill… so you shouldn’t trade with them, because as usual, you have to pay 2 – 4% of your total deposit amount as the fee for those international payment methods. This price is just too much.
  • Low spread and commission.
  • Good local supporters.

Sum up

If you are ASIAN traders, Exness is the best brokers for Scalpers.

If you are Africa traders, XM and FxPro are the best.

If you are US traders, Forex.com is the best

If you are European traders, XM, FxPro and Exness are the best.

Here are top 5 lowest spread brokers:

  1. Exness.com >>> Open account.
  2. Hotforex.com >>> Open account.
  3. FBS.com >>> Open account.
  4. XM.com >>> Open account.
  5. FxPro.com >>> Open account.

CLICK HERE FOR THE BEST FOREX BROKERS IN 2018.

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Disclaimer: All articles in this website are my personal perspective. I don’t encourage you follow them. Because you can lost all your fund. I don’t response for all your loss if you follow them.