4 digit vs 5 digit broker

hi guys, does it really matter if using a 4 digit or 5 digit broker??

does the spread really is tighter with a 5 digit broker compared to 4 digit?

other than the spread, what are the benefits?

With “5 digit” brokers you get to pay less for your trades. “5 digit” brokers will be ECN brokers in this case. You’ll probably pay like 1 pip less per trade with a “5 digit” broker, which over time amounts to a considerable quantity.

Other benefits are better execution, no paranoia of stop hunting, and the reliability that the broker is less likely to go bust. I’d say if you plan to trade with more than say 20k an ECN is a better option (i only hear good things of Interactive Brokers and Dukascopy, although Dukascopy requires a minimum 50k investment). Until then brokers like Oanda and FXCM are ok.

Here, on ac-markets explains what fractional pip means.
ACM spreads & margins | Margin trading
I do think it is an advantage� it�s like putting more numbers after the come when doing math: it gets you closer to the actual spread and which means that instead of getting 1 pip, you�ll get 1,1 pip. Get it?

i think 5-digit broker can be good to scalp with you can trade the littlest digit too :wink:

Quoting in fractional pips makes it easier for the price providers to tighten spreads gradually. It’s easier to go from 2.0 to 1.9 to 1.8 on the spread rather than giving up a whole pip from 2 to 1. The ability for competition to lower spreads is much greater if the price providers can compete on more exact prices.

could there be a possible 6 digit quoting???:confused:

I guess anything is possible :slight_smile: Since this is a decentralized market, there is the ability for broker and bank to work on customization such as fractional pips, which eventually becomes the norm.

Not all banks quote down to 5 pips currently, but that’s the way the market is trending. EBS still does not have fractional pips and that is considered THE interbank market.

I agree.
I think 5 digits will be the regular standard, and the next step will be 6 digit, for sure. This market is competitive that nowadays brokers offer anything to be on top. Forex brokers are going out of their way to please costumers and when all brokers have 5 digit spreads, they need sth else to stand out again: 6 digits

The one complaint I have seen about 5 digits is that it makes it harder to calculate the spread, especially on MT4. Maybe metaquotes will create a better layout in MT5 to make the 5th decimal superscript or something.

Its not that much of a difference, just add a come when calculating spreads :slight_smile:
Actually I have never used MT4, I trade with ACM and they hadn�t released it yet but they will soon�

I use a 5 digit brooker and while it took a while to get used to the additional digit, I don’t mind it much and it’s better for spreads IMO.

Definitely better for spreads :slight_smile:
I�m not a scalper myself, but there are many and it is an advantage for them, right?

Alpari UK is changing to flexible 5 digit spread. good to go for it :slight_smile:

I personally use FXCM. Haven’t tried Alpari before myself.

I first traded forex with FXCM. After a month or so I left: FXCM has terrible execution, their demo is not so bad but their live one is a scam. As big as FXCM is, its trading platform is too simple and old.

I would recommend that you try it yourself. FXCM is one of the largest forex brokers and the FX Trade Station recently won FX Week’s award for best retail platform, so obviously a lot of traders like it.

I don�t know about FX sol but for real, FXCM is a piece of sh—, try them out if you are curious but you�ll not like their services at all. I know they are one of the largest brokers out there, but their platform isn�t evolving as fast as other brokers� are.

What features would you like to see added to the platform?

I heard that its preferable to go with a 5 digit broker as you can earn more profit how is this?

LOL Don’t believe everything you hear… The last pip you earn or lose divided into tenths isn’t likely to help out a bottom line whole lot.

It’s more likely brokers did it to make their spreads more attractive to traders.

A 1.9 pip spread looks better than a 2.0 pip spread.

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