This low spread broker has become one of the advantages of brokers and trading platforms that can be enjoyed by their customers. The spread itself is the difference in selling or buying prices determined by two parts. To find out more about low spread brokers, you can read the article below. But before that, you can register first to be able to trade forex, commodities and stocks with low spread benefits at GIC!

Low Spread Brokers Are

Spread is the difference between the ask or ask price determined by two parts, the first is the interbank spread for a currency pair because there is a Bank that wants to buy the currency at a set price which must match the offer of the selling Bank. The second part is the broker's trading spread which retail traders use to execute the trading order itself, so the broker adds some margin on top of the raw spread, which usually represents the broker's fee.

Lowest Spread Brokers are Brokers with low fees and Spreads compared to the industry. The Lowest Spread for EUR USD pairs based on our research is around 0.1-0.9pips without commission fees. The average EUR USD spread is 1.2 pips. However, the question may be complicated, you should check the full price not just the spread and consider all costs including spreads, swaps or overnight fees, commission fees if applicable, non-trading fees, deposit fees or withdrawal fees, and inactivity fees.

  • First of all, carefully check the terms of the Lowest Spread trading provider as the broker may charge additional fees as commission per trade.
  • Choose only among reputable and well-regulated brokers, to ensure the safety of funds and fair trading conditions that are constantly monitored by the authorities.
  • Depending on trading style, strategy, expertise and size of operation Lowest Spreads and trading conditions and minimum deposit may differ for each trader.
  • Low spreads are essential for scalping or hedging strategies, as they lower costs due to the method of opening and closing many positions during a session. However, traders holding long-term positions may require fixed spreads, as they make it easier to calculate costs, as well as providing stability under any market conditions.

How Do Low Spread Brokers Work in Forex?

The bid price is the difference between the price you are willing to sell a currency for and the price your broker is willing to pay for it. The ask price is the difference between the price you are buying a currency for and the price your broker is willing to sell it for. Generally, the bid price is lower than the ask price. When you buy a Currency Pair from a broker, you are buying the base currency and selling the quote currency.

When you sell a currency pair, you are selling the base currency and receiving the quote currency. The bid and ask prices of a currency pair are used to quote it. A currency quote is the exchange rate of one currency against another. The base currency and the quote currency are terms used to describe these two currencies. The currency listed first is always the base currency. The quote currency is the second listed.

How to Get a Low Spread Broker in Forex?

There are many strategies available to get the lowest possible spreads in the forex market. Scalping is the most common type of forex strategy. This day trading strategy involves buying or selling currency pairs with a very short holding period to generate a series of very quick profits. Traders can trade a wide range of trading pairs and start trading them in less than a minute.

A trader using this strategy would set their stop-loss for long trades a few pips below the lower band, and their stop-loss for sell trades a few pips above the upper band.

The profit target will be set at the opposite band, with an average target of 5-15 pips. It is important to note that this strategy is time consuming and generally ineffective unless you are involved in day trading. We would recommend trading with a broker that is known to have very low spreads on average for both newcomers and regular forex traders, which can include any of the twelve brokers we mentioned earlier.


How to Calculate Forex Spread?

Spread is the difference between the bid/sell price of an asset. This price difference is measured in “pips” (Percentage In Points), where 1 pip is a 1 point movement in market value usually based on the fourth decimal place of the currency pair. For example in the case of EUR/USD:
  • bid/ask 1,083 35 / 1,083 40 (0.5 pip spread)
  • bid/ask 1,083 35 / 1,083 45 (1 pip spread)
  • bid/ask 1,083 35 / 1,084 85 (5 pip spread)

JPY forex pair: exception to the rule

The Japanese Yen (JPY) doesn’t follow the same rules. Spreads on JPY forex pairs are measured to the second decimal place instead of the fourth decimal place. Here’s how to calculate the spread on USD/JPY:
  • bid/ask 110.0 99 /110.1 09 (spread 1 pip)
  • bid/ask 110,1 02 /110.1 14 (spread 1,2 pip)
  • bid/ask 110.0 94 /110.1 08 (spread 1,4 pips)

How to Estimate Forex Trading Costs When Opening a Trade

Choosing a forex broker with the best spreads to offer can be invaluable, however, you should also consider and be able to estimate how much the spreads will cost you overall. Even if a broker has the lowest forex spreads, you should also pay attention to the commissions involved. Here’s how to calculate forex trading commissions easily:

 

Spread forex

So, let’s take an example. The lowest spread forex broker you can find is offering a spread of 0.1 pips . This number translated into the price of the currency pair would be 0.00001 . This means that you could see a situation for example, where the bid/ask would look like, 1.08335/1.08336 . Here you can see a 0.1 pip spread has moved the ask price all the way up to 1.08336.

With a higher spread, of course, this price would move further in the same manner. Translating this number into actual percentages, and real cash values ​​shows us just how small it really is. In this example case, a 0.1 pip spread equates to just 0.00092% (0.00001 / ask price) , or $0.92 per standard lot traded .

 

Forex commission per lot

Another thing you need to consider when looking at forex brokers with low spreads and low minimum deposits, is to double check the commission per lot that they charge. The typical commission fee, even for the lowest forex spread brokers, is usually around $7 per lot. Using this as our benchmark, this means that if you open a position for 0.5 standard lots, you will incur a commission of $3.50 on the open.

This is one way of charging fees that is sometimes referred to as a “per-side, per lot” commission. In other cases with some brokers, you may see the commission written as a “round turn.” In this case, a $7 round turn commission would mean $3.50 on the open of the trade, and $3.50 on the close. This is an important detail because you need to check more than just the lowest forex spreads with all brokers.

 

Small Spread Broker

Forex brokers with low spreads are very popular among scalping supporters, because this trading strategy involves opening many transactions in one day, and in this case the commission can amount to up to 100 pips. To reduce their costs on forex operations, traders choose dealing desks with low spreads. There are traders who consider this to be the main selection criterion. Due to low spreads, financial losses are reduced, which compares favorably with the basic principles of traders: making a profit and securing personal funds.

The brokers listed here offer floating and fixed spreads with different values, but always at a minimum or medium level. Of course, it is possible to make a large initial deposit, but brokers offering micro and mini accounts still allow trading little by little. For brokers with small spreads themselves, GIC is one of the brokers that will offer small spreads themselves. By trading at GIC and using the account type that has been provided, you can get these small spreads.

With the P2P concept, GICTrade is able to provide very competitive and low spreads. The market maker function plays a role as an instant liquidity provider, reducing spreads, and trading slippage. GICTrade has a very competitive spread if not the lowest in Indonesia at the moment.

Added with no commission and free swap makes GICTrade a very 'trader friendly' platform. After knowing about low spread brokers, you can start trading with GIC and get the lowest spread. Also, don't forget to read other articles such as Spread are? This is the Definition, and Calculation.