0.8 is still better than 5. 
5? This is the spread on which instrument? If itâs for a Forex pair, itâs too high. Is this for a standard account?
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NZDUSD usually has 3-8 spread on a micro account. Depends on the volatility.
It also depends on the broker. Eight pips is a big spread.
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Yes, 8 is very big. So I changed to a Zero account and now itâs around 0.8 all the time. Commission is 2x $3.5 / 100.000 traded which is cool.
Well, thatâs not exactly zero spread, but it is much, much better than 8 pips.
I see few brokers offer this; but not sure about the actual environment in there!
Typically an account that charges no commission per trade is a market maker account. This means your trade doesnât actually go to market. Also in lieu of commission the spread tends to be significantly higher. With a small account and trading higher time frames this should not really matter, it may also be cheaper for you if you have a lot of scratch trades meaning trades that you close and exit close to your entry or at break even.
Yeah, I like this Zero account.
Make sure to research them well and to find out whether they are regulated and by whom.
Okay, Iâll! Thank you very much for your advice!
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Hi @OutofWork66,
Not to pick on you personally, but your comments reveal some misconceptions about the forex market we would like to address.
Itâs important to understand that if a particular retail forex broker tells you they are not a market maker themselves, that only means they must offset your trades with another firm that is a market maker. Thatâs 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 worldâs 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.
For more information on the three methods retail forex brokers can use to offset your trades, you can read this post: Who is the counterparty in an exchange?
Full disclosure: FOREX.com is a market maker, but thatâs not why we defend this model. (In fact, for institutional traders, our parent company, GAIN Capital, offers ECN solutions through the GTX marketplace.) Rather, we are a market maker for retail forex traders, because we believe market making is the best way 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 donât outsource that responsibility to a third party. Itâs not our intention to make this discussion about ourselves, but we wanted to address the misconceptions some people have about the market makers and the vital role they play in financial markets whether you trade forex, stocks or commodities.
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Hi there, thanks for clarifying your point of view. As you know there is a hell of a lot of innuendo and banter about brokers, market makers, ecn,stp,dma,dmm, blah blah. I personally havenât had any bad experience with any broker at all, but I have come across some horror stories. Not intending to offend any brokers in any way with my comments, its just that I donât like hearing bad stories about brokers playing games with their clientele and the platforms in question like MT4 which can be broker manipulated, when traders that trade large size are having a lucky streak of wins and try to withdrawal their funds. And not to mention this happens in all things betting, bookmakers, casinos inclusive.Your probably one of the good guys, thatâs great to know. Enjoy your dayâŚ
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No offense taken, @OutofWork66, and weâre glad to know you havenât had any bad experiences personally. You are correct to point out that there are good service providers and bad service providers in every industry.
We wanted to point out that there is always a market maker when you trade forex. Either your retail forex broker is a market maker themselves, or your broker must offset their own risk with another firm that is a market maker. Therefore, itâs important to keep mind that, market maker or not, what matters is the quality of your broker.
In regards to the horror stories you mentioned, focusing on brokers that are regulated by reputable government authorities can go a long way to addressing your concerns. The advantage of trading with a well-regulated broker is that there 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.
For example, the CFTC and NFA set the requirements a broker must meet in order to offer forex trading to US residents. Though not an exhaustive list, this membership application will give you an idea of some of those requirements: Compliance Requirements for Retail Foreign Exchange Dealer (RFED) Applicants | NFA
- 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 ÂŁ50,000 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.
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