All About ForexCT Spreads
Crucial to making profitable trades on the Forex market is identifying which brokers and market makers have the most competitive spreads. For a long time, spreads were extremely wide; five pips was the norm. As the industry grew and evolved however, this began to change.
Largely due to increased competition, brokers’ spreads have narrowed considerably in the last few years. Still, spreads for specific currency pairs vary widely. Whether you’re new to trading on the Forex market or are a seasoned professional, it still pays to identify brokers with the most competitive spreads. ForexCT offers some of the most competitive spreads around, and that’s especially true if you primarily trade AUD/USD.
What Exactly Are Spreads?
Before delving into how ForexCT spreads compare with those of other major brokers, it helps to have a decent understanding of what spreads are all about. The vast majority of today’s brokers and market makers solely make money off spreads. Most have done away with commissions and other fees, so they subsist almost entirely off the money they make from spreads.
Put simply, a spread is the difference between the price you buy at (ask price) and the price you sell at (bid price). Spreads are quoted in pips. Wider spreads result in higher ask prices and lower bid prices, which means that you pay more when buying and receive less when selling. Needless to say, narrow spreads give you the best chance of making decent profits on your trades.
Fixed Spreads Versus Variable Spreads
In addition to considering the spreads that are offered by any given broker, you should consider whether they are fixed or variable. This concept is easy enough to understand. A fixed spread means that you pay the same spread regardless of market conditions. A variable spread, on the other hand, fluctuates depending on what the market is doing. Variable spreads closely adhere to the prices that are actually offered in the interbank market.
This often results in a narrower spread, but it also means that the cost of entry can vary, which makes some strategies unfeasible. ForexCT spreads are fixed, which is another reason why so many traders prefer trading with them.
ForexCT spreads are among the most competitive around. On major currency pairs, including AUD/USD, they start at two pips. Clients with especially high trading volumes may be eligible for even more competitive spreads, but rates are very competitive for clients across all levels. What’s more is that their spreads are fixed, and they remain constant no matter what the market does.
How ForexCT Spreads Compare with Other Brokers’ Spreads
As a savvy trader, you are wise to compare and contrast various brokers and market makers to identify the one that offers you the best odds of making highly profitable trades. Comparing brokers’ spreads is an excellent way to do this. With that in mind, how does ForexCT stack up to other popular brokers?
Here’s a quick rundown of the spreads that are currently being offered by major brokers on the AUD/USD currency pair:
- Forex.com – The typical spread for this broker starts at around 1.6 pips. However, their spreads are variable, so you must check them before initiating any trades.
- EasyForex – This broker offers fixed spreads, but they vary depending on the type of account that is being used. They start at three pips for standard accounts, 2.5 pips for premium accounts and 1.8 pips for VIP accounts.
- GoMarkets – This reputable broker advertises different spreads for different accounts. Standard account from 1.1 pips, Pro account from 0.1 pips, and Plus+ account from 0.0 pips. However, most of its currency pairs have spreads that start at around 1.8 pips. These are fixed spreads.
- Plus500 – Plus500 offers fixed spreads starting at two pips. Although this might seem expensive, many traders find it comforting knowing there are no surprises when it comes to spread fees.
Common Questions & Answers About ForexCT
Here are some answers to a few commonly asked questions regarding spreads in both generally and ForexCT spreads specifically:
Does ForexCT Charge Additional Fees Besides the Spread?
The answer is simple. No. ForexCT strictly makes money from the spreads that it charges, which also happens to be among the most competitive in the industry.
How Much Does a Spread Really Matter?
Knowing and understanding spreads is incredibly important and really does matter! A spread that differs by as little as half a pip can mean the difference between making a profitable trade and an unsuccessful trade.
Which is Better, Variable Spreads or Fixed Spreads?
Some traders prefer variable spreads because they believe they are more competitive in the long run. However, most stick with fixed spreads because they don’t want to be limited in terms of the strategies they use. Another advantage of a fixed spread is that you always know the cost of entry.
The Bottom Line on ForexCT Spreads
While you should certainly still do plenty of research to find a broker with the most competitive spreads, you shouldn’t automatically discount ForexCT. The company offers traders a raft of high quality services and is adequately regulated by local Australian authority. If you’re looking to change brokers make sure to factor in all features of a company before making the decision to shift.
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