What is the advantage of a broker offering a narrow spread plus commission if the total fee is the same as a broker with no commission?
I am specifically reffering to Pepperstones Razor account (commission plus minimum spread) and am wondering what the advantage is over the standard account (no commission normal spread).
With regards to Pepperstone: the Razor a/c was designed with scalpers in mind, while the Standard a/c is mostly designed for longer-term traders (swing,position traders). So it depends on your style of trading.
I understand that but I feel that someone like Oanda with their low spreads and no commision would be better than Peppersone Razor since you can take into account the total fee (via the spread) when you are planning the scalp. With commission there would be a missing price element that would only be seen with the execution of the trade.
But I understand that trading is very personal and some may prefer this, I just don't think it is for me.
I personally don't think a commission broker offers advantages that a none commission broker does.
I tried Pepperstone Razor account because of it's tight spreads but when my first trade went through I had a $.40 profit but it took out $1.50 worth of commissions plus swap fees and I was down $-1.68.
For my small account I generally only makes $2 - $3 per trade. So the profits will mostly be sucked up by commissions and not leave much to grow the account. For my small account this is not the right kind of broker that is good for me.
I have another account with FX Choice that has reasonably tight spreads and it doesn't take out commissions, it works out a lot better, at least I don't see unreasonable deduction coming out of my profits.
The commission charges for each trades, is like being punished for making that trade. It maybe more bearable when you make more per trade to leave enough profits behind but if it doesn't, you're really taking a beating each time a trade happens.
makes no difference. trading costs are trading costs, be it a dime or two nickels. compare the total cost of each trade (round trip) and if they're very close, look at other aspects such as slippage control, deposit / withdrawal fees, dormant account times & fees, etc.
and then ignore the broker and get on with the actual trading. if the broker is a good one, you won't notice them and you'll just notice your account going up (or down).