HomeTrading ConditionsBest Low Spread Forex Brokers

Best Forex Broker for Low Spreads in 2021

Trading forex can be frustrating if every time you close your position, you make just enough money to cover the spread on your trade. This means that you aren't making any money as everything you make is used to cover trading costs. Consequently, traders should be interested in which brokers offer the smallest spreads and charge the lowest fees. In this guide, we present what we believe to be the best forex brokers for low spreads.

Our List of the Best Forex Brokers for Low Spreads

We’ve selected the best forex brokers for low spreads based mainly on the spreads but also   with consideration of low fee structures, fast execution, no hidden fees, and regulation by reputable market regulators. The best forex brokers for low spreads in 2021 are as follows.

1
Min. Deposit
$200
Exclusive promotion
Our score
10
Leverage
30:1
New accounts
Spreads
1
PIPs
Regulations
CySEC, FCA
Forex Pairs
No Fee
Start Trading
Pros:
Join the Social Trading revolution. Connect with other traders, discuss trading strategies, and use our patented CopyTrader
eToro is the world’s leading social trading platform, offering a wide array of tools to invest in the capital markets
Largest number of currency pairs to trade
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
Leverage
500:1
New accounts
Spreads
0.8
PIPs
Regulations
Forex Pairs
55+
No Fee
Start Trading
Pros:
55+ currency pairs available
Trade on a trusted platform
24/7 support via live chats, email or phone call
Payment Methods
Credit Card, Debit Card, Visa, Bitcoin
Full regulations list:
LonghornFX offers high-leverage trading on a wide variety of assets. Trading with leverage carries a degree of risk which may result in losing more than your investments. Clients should practise risk management to protect themselves from losing more than they can afford when trading with leverage.
3
Min. Deposit
$200
Exclusive promotion
Our score
8.7
Leverage
500:1
New accounts
Spreads
0.5
PIPs
Regulations
FSPR, FMA New Zealand
Forex Pairs
27+
No Fee
Start Trading
Pros:
BlackBull Markets’ unique feature lies in its stated goal of delivering an “institutional” trading experience to retail clients
No-Dealing Desk Broker (NDD), with Straight Through Processing (STP) all done on a true ECN
State of the art Equinix servers, based in New York (NY4), London (LD5) and Tokyo (TY3)
Payment Methods
Mastercard, Visa, Bank Transfer, Neteller, Skrill, UnionPay, FasaPay
Full regulations list:
FSPR, FMA New Zealand
4
Min. Deposit
$10
Exclusive promotion
Our score
8.5
Leverage
500:1
New accounts
Spreads
0.7
PIPs
Regulations
Forex Pairs
55+
No Fee
Start Trading
Pros:
Can fund with BTC
64 global companies including Netflix and Amazon
Free deposits and withdrawals
Payment Methods
Credit Card, Debit Card, Bitcoin, Wire Transfer
Full regulations list:
EagleFX offers leveraged trading on a range of assets within its platform. CFD and Spot Forex trading do carry a degree of risk which may result in you losing more than your initial investment. Please ensure you fully understand the risks involved with leveraged trading and ensure this is not detrimental to your personal or institution's financial well being.

What Is a Forex Broker for Low Spreads?

The term spread refers to the difference between the ask price (the price at which you buy a currency) and the bid price (the price at which you sell a currency). For example, the GBP/USD currency pair might have a bid/ask price of 1.4147/1.4150. The spread is the absolute difference between the bid and ask, which in this case is 0.0003. Brokers quote spreads in terms of pips, which usually require you to divide by 100. Therefore, the spread of this currency pair is 0.03 pips.

How Does a Forex Broker for Low Spreads Work?

Some forex brokers charge fixed spreads on currency pairs. They can do this because they hold an inventory of the currency that they use to sell to buyers and buy from sellers. This spread can appear to be low on major currency pairs but high on exotic pairs. Other brokers may not have an inventory of currency, so they allow variable spreads on currency pairs. This means that the spread on a currency can be as low as 0.00 pips on one day and higher on another day.

Key Features To Look For in a Forex Broker for Low Spreads

When choosing a forex broker, the features you should look out for are low spreads, low fees, regulation, and the range of payment methods. Let’s look at these in turn.

Low Spreads

Make sure your broker quotes low spreads for currency pairs, noting that some brokers offer low fixed spreads across all currency pairs whereas some apply variable spreads. Apart from their advertising — brokers often shout about their low spreads — you can use a broker’s demo account to assess the spreads before signing up for a live trading account.

Low Fees

Looking for low spreads means you are trying to maximize your profits by reducing the cost of trading. Therefore, it also makes sense to seek a broker that charges little to no fees for trading. A transparent broker will have a clear listing of the fees charged when using their platform.

Regulation

Having a broker regulated by a reputable regulatory authority provides the trader with a layer of protection. A regulated broker tends to have a more transparent fee structure and tends to be objective when resolving trade disputes as the laws of the regulating authority govern them. Regulated brokers will say that they are, but you should also be able to search the relevant regulator’s website for the name of the financial firm.

Payment Methods

A good broker will offer various methods for funding your and withdrawing your money. Typical payment methods include bank transfer, debit card, and sometimes even PayPal.

Pros & Cons Of Using a Forex Broker for Low Spreads

Pros

Traders enjoy the lowest spreads on the market
Profits may be higher as the spreads are reduced
Fast execution of trade
Regulated brokers provide an additional layer of protection for traders
Brokers may offer a low initial amount to fund your account

Cons

Fees may be higher for low spread trading
Fixed spread brokers may be taking the opposite side of your trades
Traders may not have direct market access

How To Choose the Best Low Spread Forex Broker for Me?

To choose the best broker for low spread trading, you must obviously ensure that your broker offers low spreads. This means you would have to compare the spreads at different brokers. To do this, you do not have to open an account at multiple brokers; you can compare the spreads at different brokers by requesting a demo account that is free to use. Please note that a demo account replicates the trading experience and any profits made do not reflect any real gains.

How to Safely Use a Broker to Make Money Online Trading?

If you have been trading foreign currencies for a while, you will have heard of trading strategies like spinning and hunting, or hedging. One particular strategy that requires low spreads is scalping. Scalping is where you open a position with the intention of closing once the price moves a set amount of pips, usually 10-20 pips. This strategy would be most effective if the spreads on the trade are low. If your broker has a fixed spread on a currency pair of 40 pips, the scalping strategy would require the price of the currency pair to increase by 50-60 pips before you reach your target profit on the trade. However, if the spread was lower, you would require less movement in pips.
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Conclusion

Trading forex can become costly if a trader is unaware of the costs they are paying to trade. A broker that charges zero commissions might not be cost-effective if it imposes wide sporeads. Doing a complete analysis of a broker's fee structure and going after brokers that allow low-spread trading may significantly increase your profits.

Frequently Asked Questions

  1. The term pip means percentage in point or price interest point. This represents a unit of change in the quoted price of a currency pair.

  2. Some brokers can charge a fixed spread since they hold an inventory of currencies. That way, they can buy from a trader when they want to sell and sell to a trader when they want to buy.

  3. Leverage represents the amount a broker lends a trader to make trades. So a 200:1 leverage means that for every $1 in your account, you can place a trade worth up to $200.

  4. STP means straight-through processing. This type of broker often has fast execution on trades but may charge extra for this service.

  5. An inactivity fee is a fee charged by your broker for not using your account for a period of days. Usually, a broker charges an inactivity fee every 90 days of no trading activity.

  6. Spreads may be high because the currency pair you are trading is not as liquid. Spreads on currency pairs that are traded frequently tend to be lower.

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