I know the spread changes but man, I just had a 30+ pip swing on the spread while I was in a trade. I was profitable a couple pips and then after 5 PM ET, the spread changed and jumped to 42 pips on GBPJPY!
It’s back down to between 15-22 pips. Just a PSA to watch out! A tight stop could work against you really quick!
That’s one of my top reasons for using a fixed spread broker.
indeed, experience already suggests always the right options
Have you ever compared them to variable spread brokers?
Highly recommended.
Commissions over spread, always.
And how do the commissions work?
Fixed commissions for each trade, usually around 8 USD per lot depending on the broker.
And when you do the math that usually ends up being the same you would pay in spreads.
On net you end up paying a little more for pairs like EURUSD that usually have lower spreads, so in comparison there the commission tends to be a bit higher for it than what you would pay otherwise regularly.
But you net that out in other pairs that usually have much wider and more volatile spreads, so commissions work MUCH better there.
Net net in costs there’s NO difference overall, but with the fixed commissions you avoid spreads widening, limit orders not being filled because of the spread, and all those other annoying things.
So then doesn’t it matter what you trade? And maybe when you trade?
I can see fixed spreads helping in low volume pairs at low-volume parts of the day. But if all I’m trading is EURUSD during London or NY session, doesn’t it make sense to go with a changing spread broker?
But all newbies rush to get to the answer. Some things can only be achieved with time.
Of course, besides lowering the costs, when you want to trade on volatile markets, the costs will always be fixed. This ensures that you always know how much a trade will cost you.
There’s still the problem of spread widening during news and high volatility events, which happen exactly during those sessions.
And if you are trading intraday with tight stops where 1 or 2 pips matter quite a lot, then the commission based account is still the best option.
Exactly.