I just started learning the babypips school since last week, and opened a demo account a few days ago. Basically attending the school during the day, then practicing at night for a few hours. Since I have a full time job, I can only do scalp trading at night. Will try day trading after I’m familiar with the right stop loss setting.
This keeps bugging me since I started the demo account. With my trading preference, should I look for account that gives big floating spread but zero commission, or is it better to get tight (almost zero) spread but with commission per lot ? Can you help explaining this to me with some logic please.
I’ve checked around the forum and school materials, but couldnt get a satisfying answer for this.
The brokers in my country give huge numbers for either the spreads and commission. Most of them can be 5 spreads or $25/lot commission.
Last night I checked IC Markets, and they have the best spread and commission so far. But still, I’m confused which to sacrifice ? The spread or commission ?
Dont worry, I will stay with the demo account for a few months. But I cant find a demo that use commission, so I cant try trading with that handicap. For me that can only get 10 pips per trade (for now), what is your suggestion ?
Hi.
Difficult to give a short answer as there are a number of variables.
What pairs are you trading? EurUsd is the most popular and has the tightest spreads, other than during big news events you shouldn’t be offered more than a 2 pip spread here.
How much will you open your account with? If its $1000 or less you would be advised to trade micro lots (0.01 lot size) so paying commission would probably be more costly than paying the spread. You’ll need to do the calculations yourself based on the pairs you trade.
Check if you need to pay the commission once only per trade or twice (once when entering, again when closing) as this makes a big difference
I would just trade on popular ones, and my current plan is to deposit $1000 for starter.
The commission is one time only per lot traded. If you have tried trading with commission fee, would the commission applied right after you enter the trade ( big minus at start ), or that commission is taken after you close the trade ?
If there’s a demo/trial account using commission, please let me know. I would love to try both spread and commission based trading, to see which one is more suitable
This isn’t in the “commission” ball-park at all, Kabuto.
I think you need to look at counterparty market-maker brokers with narrow spreads.
For what it’s worth, if anything, I recommend Oanda (and I recommend avoiding FXCM).
There are loads, but the [U]lowest[/U]-deposit one I know of ([I]there may be others I don’t know of[/I]) is for a $10,000 minimum deposit.
Even if there are others without such requirements, it’s [I]extremely[/I] difficult to see that it can possibly work out more efficiently for you to pay commissions rather than spreads. For this reason, although it’s also possible that I may be mistaken, my own view is that you don’t really have a decision to make at all over this issue.
This is “history” now (i.e. it was quite a few years ago) but I wasn’t able to move from Oanda to a “genuine broker” until I had a five-figure sum to deposit - and it wouldn’t have been economical for me to do so before that anyway.
why would paying the comission when trading micro lots be more costly than the spread? I’m just in the same situation of thinking about changing to a small comission based account. But as far as I understand it from broker websites and demo accounts, when trading micro lots you only have to pay 1/100th of the lot comission. So given the (huge) numbers of the threadstarter that comission would equal a 2,5 pip higher spread(or 5 pips if he has to pay both sides).
Or do I have a mistake in my calculation?
So I take it that choosing no commission would be better for me ? Alright then
Oh btw, I just found out that ICMarkets can give demo accounts for commission based. the web said $3,5 per lot. but in actual they charge twice, so -7 on the total right after I clicked buy/sell.
I’ll check Oanda right after this. Thanks lexys
While Lexys makes no secret of his dislike for FXCM, I encourage those interested to see the discussion we had with each other. Then you can read the concerns he raised and my responses. :57:
If you have any additional questions about FXCM, please feel free to reach out to me in the Broker Aid Station.