Broker spread spikes

hi, i did some analysis on spread widening with myfxbook data for following currencies:
EURUSD GBPUSD USDJPY GBPJPY USDCAD EURAUD EURJPY AUDCAD AUDJPY AUDNZD AUDUSD CADJPY EURCAD EURCHF EURGBP EURNZD GBPCHF GBPCAD NZDJPY NZDCAD USDCHF NZDUSD CHFJPY AUDCHF NZDCHF GBPNZD CADCHF GBPAUD

chart has only the top 20% brokers with least spread widening.

in the chart is the name of the broker, the currency with biggest spread spike, and the spike in pips.

i want to have the broker with least spread widening possible because unpredictable spread widening can kill my trades. i also want to avoid market maker brokers because the conflict of interest. and its probably good idea to choose one of the big brokers (big daily trading volume / most users) to make sure that there wont be withdrawal problems. so which broker should i choose? theres not many reviews on amana capital. forex com is a market maker so not good. instaforex, octaforex,simplefx have some negative reviews online. should i pick exness?

First start with the pairs you trade/will trade.
Then find brokers in your region (preferably STP/DMA).
And finally, then get the charts for the widenings - if the data is nearly the same (in a perfect world they’d be the same) for those brokers then you will know that they do not manipulate them.

P.S You should not be looking at different currency pairs when making the comparison between the brokers. Take 1 pair (GBP/JPY for example) and compare all the brokers on the list’s spreads for that pair. Then do it for the other pairs you’ll be trading.
Otherwise it’s comparing apples to oranges.

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thanks for comment

you assume that i trade only few pairs but i actually trade all those pairs.

im assuming that myfxbook data is correct.
url example:Real IC Markets EURUSD Spread | Myfxbook

they say on the page that: “Data is sampled from over 10,000 real accounts for an exact representation of a broker’s spread volatility.”

of course that statement doesnt prove that the data is correct.

the reason i am comparing the pairs with most spread widening is this: the more spread widening in the worst pair, the more spread widening in other pairs in general as well. so it gives a good overall sense of how much spread widening there is in general.

anybody here have experience with tickmill or exness ecn? which one would be better?

Spread is essentially the difference between the ask price and bid price of a currency exchange pair. A trader will always require lower transaction costs along with the facility of lower spread to enjoy a profitable journey. I am happy that I am enjoying a lowest zero spread on every currency pair from my broker ForexChief.

Hi @rsejoo123,

Your comments about market makers reveal some misconceptions about the forex market we would like to address. It’s worth noting that for institutional traders, FOREX.com’s parent company, GAIN Capital, offered ECN solutions through the GTX marketplace which we sold earlier this year.

However, for retail traders we are a market maker, because we believe this is the best way for us to provide our retail clients with reliable pricing at retail trade sizes while effectively managing our own risk. We are fully accountable for every execution and don’t outsource that responsibility to a third party. You can see some of the benefits of this approach from the chart you included in your original post.

Even if a particular retail forex broker tells you they are not a market maker, that does not change the fact that they must offset your trades with another firm that is a market maker. That’s because market makers perform a vital service, not only in forex, but in many financial markets, including major stock and futures exchanges.

Consider what the world’s largest stock exchange says about how their market model works:

The cornerstone of the NYSE market model is the Designated Market Maker (DMM). DMMs have obligations to maintain fair and orderly markets for their assigned securities. They operate both manually and electronically to facilitate price discovery during market opens, closes and during periods of trading imbalances or instability. This high touch approach is crucial for offering the best prices, dampening volatility, adding liquidity and enhancing value.

DMMs apply their market experience and judgment of dynamic trading conditions, macroeconomic news and industry-specific intelligence, to inform their decisions. A valuable resource for our listed company community, DMMs offer insights, while making capital commitments, maintaining market integrity, and supporting price discovery.

As in any industry, whether it’s cars, clothing, hotels or restaurants, what matters is the quality of your service provider. When it comes to choosing a forex broker, the most important factor is strong regulation. Recently, there have been several discussions on this forum highlighting the dangers of trading with unregulated brokers:

Forex is regulated by government bodies in major financial centers around the world. For traders who live in those major trading centers, it makes sense to focus on brokers regulated in their home country.

Traders who don’t live in one of those countries should consider brokers regulated in major financial centers appropriate for their region. For example:

  • In the US, forex is regulated by the CFTC and NFA, and brokers are required to maintain net capital of $20 million.
  • In the UK, forex trading is regulated by the FCA and funds are protected for up to £50,000 per client by the FSCS.
  • In Canada, forex trading is regulated by IIROC and funds are protected for up to $1 million per client by the CIPF.

Once you have focused your search on the well-regulated brokers appropriate for your region, then you choose from among those regulated brokers based on other important factors such as customer service, trading platforms, charting options, educational resources, research and spreads.

Where do you live?

im from eu. maybe the only way to find out if forex.com is trustworthy broker is to try it out myself. i like that your spreads are stable. if i have understood correctly forex.com is the biggest (daily) volume forex broker.

If you don’t want brokers manipulating their spreads, focus your currency trading on the futures market. Same charts essentially…that’s where I trade currencies 90% of the time.

Based on where you live, our UK-regulated entity could be a good fit for you. Key advantages of trading with a well-regulated broker are:

  • minimum financial and trading standards they must meet,
  • ongoing monitoring by the regulators to ensure compliance,
  • a framework for handling complaints from customers, and the
  • power to enforce actions against regulated brokers for violations.

Specifically, best execution is a requirement of the EU Markets in Financial Instruments Directive (MiFiD) and the Financial Conduct Authority (FCA), and applies to all firms regulated in Europe who execute orders on behalf of retail and professional clients.

At its heart, best execution refers to our obligation to take all sufficient steps to consistently obtain the best possible result when executing orders on our clients’ behalf.

Furthermore, since FOREX.com UK is regulated by the Financial Conduct Authority, your funds deposited with us would be protected for up to £50,000 by the Financial Services Compensation Scheme.

Also, FOREX.com UK can provide you with access to trade commodities (Oil), indices (S&P 500) and cryptocurrencies (Bitcoin) in addition to the currencies (Euro) and metals (Gold) you can trade through FOREX.com US*.

It’s hard to get official volume numbers for all the market participants, since the forex market is not centralized. Private companies do not have to disclose their financials as we have to as part of a publicly-traded company, GAIN Capital (NYSE ticker: GCAP). However, industry reports such as Finance Magnates’ list us among the biggest.


*Spot bitcoin trading is not available to FOREX.com US clients at this time, but US residents now have access to bitcoin futures trading.