April 28, 2022

Which is better? FXPro's Fixed or Floating Spread?

FXPro offers 2 types of spreads that are fixed and floating. Do you know which one is better?

FXPro-offers-2-types-of-spreads-that-are-fixed-and-floating.-Do-you-know-which-one-is-better FXPro-offers-2-types-of-spreads-that-are-fixed-and-floating.-Do-you-know-which-one-is-better

FXPro’s Fixed and Floating Spread

FXPro offers competitive spreads across all the platforms, with 0 commission.

On the cTrader platform account, however, spreads on FX & metals are much lower, but have an additional commission charged when you enter and exit a position. The commission is $45 per $1million USD traded.

For the minimum and average spreads for each account type, please check the specifications for the specific instrument.

First, you need to select from the “Markets” Tab the underlying category and then click on the specific instrument of your choice to check the average spread.

Spreads are floating, which means they are variable and fluctuate according to market conditions, with the exception of the ‘MT4 Fixed’ account which offers fixed spreads on 7 major FX pairs during certain time periods.

For details of the Fixed spreads, please check the website specifications for EURGBP, EURJPY, EURUSD, GBPJPY, GBPUSD, USDCAD &USDJPY.

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Floating Spread vs Fixed Spread

The difference between the ask price and the bid price is the spread and is measured in pips.

Taking into account the spread at the time of trading is a very important factor because the spread is considered a commission payable by clients for their trading operations.

Modern brokerages work in the Forex and CFD markets to offer their clients different types of trading accounts with different spreads and different trading conditions.

Spreads can be divided into two major groups:

  • Fixed Spread Broker
  • Floating spread broker

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Fixed spread

As the name suggests, this type of spread does not change over time, with normal fluctuations.

This does not include situations when the market fluctuates significantly in a very short period of time, in which case the spread will increase for a short time, i.e. a new Fixed level; when the market calms down and returns to normal liquidity, the spread will return to the normal level.

Despite the high price volatility, fixed spread betting is still a good investment choice for investors, because it is more predictable, that is Say the risk is lower.

In recent years the big competing brokerages have been trying to offer some innovations including the case with spreads.

More companies are introducing floating spreads.

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Floating spread

Floating spreads in the foreign exchange market and CFDs are constantly changing the value between the purchase price and the bid price. Floating spreads – a purely market phenomenon and it is, above all, for interbank relations.

Therefore usually trading accounts with floating The spreads that several companies offer to their clients are so-called ECN (Electronic Communication Network).

ECN Forex brokers provide a platform where participants (banks, market makers and private investors), and transactions are submitted through a system of buy and sell applications Procedures to each other.

Clients trading on ECN tend to lower spreads, but at the same time working on this account they pay your brokerage fee.

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Do you prefer Fixed or Floating Spread?

In general, if you compare the spread which is more important to benefit the client, from our point of view it is a fixed but fairly low spread.

Often, with advertised floating spreads, brokers emphasize the fact that it is a real “market” and lower than a fixed range.

This is true in theory, but in practice, in real trading, especially in positive volatility In the market, clients have problems with floating spreads and they are not ready for it.

One such problem is increased spreads, which can climb up to 8-10 pips on major currency pairs.

Also, orders can be executed at prices that are substantially more than The declared value and, therefore, the broker’s client-side cannot be generated without claims.

Traders, systematically trading, with regard to the mandatory use of stop-loss orders, cannot fully predict their trades because the broker may deliberately disturb the “stop-loss”, which refers to the market situation.

Thus, we again note that the fixed low spreads are easier and more predictable than the band for the client.

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