Forex brokers are competing to win more clients, and the best way is to offer the lowest spread in the market, as the spread is one of the most important factors to consider when choosing a Forex broker. However, if you call yourself a trader, you are familiar with the term and know how fierce the competition is to win you as a client. But which forex broker offers the best spread? Be aware; some brokers might offer the lowest spread to lure you in as a client.
If you are new to the forex and have yet to learn what we are talking about, wait; in a few sentences, everything becomes clearer. Here we will first talk about spread, zero spread accounts, and the best forex broker with the lowest spread. If you are familiar with the concept, skip the definition part, jump to the main part, and choose your broker; no hard feelings, and we wouldn’t be offended, skip, scan, or skim. Just let me know if this article was helpful.
Table of Contents
What is spread in forex trading?
Dealing in forex, you will always face two sets of prices; the first is called ‘bid’, and the other is ‘ask’. The ‘ask’ is the price you can buy a currency. As the name suggests, the asking price is the price you are looking for to buy a base currency.
On the other hand, we have a bid price, which is the price at which you are willing to sell base currencies. Usually, there is a difference between the sell and buy prices called the spread, referred to as the bid/ask spread.
Spread is a source of income for forex brokers. No commission brokers tend to use spread to provide liquidity in the market. The spread is the cost you will pay for making a trade. It does make sense since the broker has to make money somehow, so they sell currencies for more than they paid to buy it, and they buy currency from you for less than its actual cost.
It is like a universal. A person buying something to sell it later will always buy it for less than he will receive when he sells it. For example, let’s say you are selling your car; the car dealer will lower the price at a price lower t it will sell later to make a profit. The dealer’s profit is called spread; it can be low or high depending on the dealer. That is why you hear the same question in the different forex forums. Which forex broker has the lowest spread? And you might find answers, including the term’ zero-spread account’ as well, which we will discuss in the next part.
What is a zero-spread account?
Some forex broker provides you with zero-spread accounts to win you over. But what does that mean? In a 0 spread forex broker, there is no difference between the bid and ask price, not even a pip. It sounds too good to be through; you might even as what the catch is for such brokers.
Remember that there are other ways for a broker to trade costs money, and there are trading costs. You might wonder if it is impossible to find a broker with the lowest spread that would charge you a commission to compensate for the spread.
You might find no commission brokers trying to get you in but beware; it is a trick to get you in because they will make a profit, and the commission is built into the spread. Now let’s talk about some of the lowest spread forex brokers.
Tickmill
Search for a low-spread forex broker, and Tickmill’s name will appear on the search result. You will find three types of accounts in Tickmill; the first is Classic, which is entirely commission free, but you have to pay the bid/ask spread. The average spread in Tickmill is 0.11 pips.
In Pro and VIP accounts, you have to pay a pre-trade commission. Clients in Pro accounts are offered low commission fees, low-cost spreads, and 62 currency pairs. In a VIP account, you must keep a $50000 balance to enjoy a $1 commission.
CMC Markets
CMC is a web trading platform with consistent prices known as a low-spread broker. It provides clients with excellent web and mobile platforms and research materials.
Interactive Brokers
As a professional trader, you will find this broker helpful as it is a multi-asset broker with competitive fees of $2 and a wide range of global markets.
Capital.com
If you are new to the forex, this broker will be helpful with useful educational and user-friendly content.
Pepperstone
This broker offers one of the lowest spreads in the market, with an average spread of 0.16 pips.
IC Markets
The other lowest-spread forex broker in this list is IC Markets, with an average spread of 0.10 pips.
Is there a broker with 0 spread?
As all the above brokers use spreads, there is a low spread, no commission forex broker.
Many brokers are claiming zero spreads, but the fact is, in most cases, the spread is worse. In our research, we have found only one broker that truly offers zero spread. Aron Groups with competitive spreads from zero and leverage 1: 1000.
Aron Groups offers multiple accounts with different trading platforms, spreads, and commissions, and you can choose the best one that suits your trading style. Aron Groups’ broker provides clients with the best trading platform on the market; Meta Trader 5.
When choosing a different account, remember that spread will affect your trade only if your trading strategy is spread-sensitive. Low-spread forex brokers’ scalping strategy is the best strategy to trade for professional traders.
Aron Groups broker
Considering all the above information, Aron Group has the best spread in the market. There are 4 types of accounts in Aron Groups:
- Nano or Islamic account with a fixed spread
- Standard or ECN account with a floating spread that is determined according to the market situation.
- Islamic account (ECN) with a floating spread that is determined according to the market situation,
- VIP (ECN) account offers a floating spread that depends on the market situation.