Fix spread account
- Published: Friday, 20 July 2018 17:12
- Written by Super User
- Hits: 176
Fix spread account
Spread is the difference between a deal between selling (ask) and buying (bid) at a bargain price.
You can say that this is the broker's profit that it provides traders. The concept is divided into 2
types: fixed spread or floating. But its units of measure are not in currency, but in points. It turns
out that the more the figure is indicated, the more money will be received by the broker, with
which the operation is performed. So what's the difference and how do you prefer it, it's more
profitable to choose a broker to save your money?
For the convenience of traders, some brokers indicate in advance the amount of the spread. Each
account has its own indicator for a currency pair. This figure does not change, and whichever
operation you perform, it will be unchanged. For example, a trader Sam wants to sell € 2000, but
there are no buyers in nearby regions.
The broker with whom he works will offer him more than a hundred buyers, while offering to
sell for a different amount - the euro for $ 2 175. In another country, trader James just needs to
buy € 2000. The broker closes the deal on the purchase amount of $ 2,221. As a result, the
broker's profit will be $ 46. At each broker this indicator is especially individual. When you open
an account, you must take these points into account. Measuring in points is a compulsory
measure, because, depending on the currency quotations, the income will also change.
As a rule, when opening cent accounts a fixed spread is greater than on dollar or VIP accounts.
Therefore, if you want to benefit from transactions, it is wiser to immediately open a decent
account. You only need to properly develop a strategy or use forecasts to make a successful
transaction and get your profit and profit.
Pros and cons of the offer
Like all indicators, it has pros and cons. Advantages of a fixed spread are:
• No jumps. This convenience and confidence that, for example, during the holidays or the
adoption of political agreements, you will not be left at a loss.
• When trading any number of currency pairs, especially popular ones that are in demand
and supply, the percentage of the transaction will not change.
• It can easily knock down the Stop Loss. To do this, you can immediately specify the
spread in the settings, and it will not need to be changed in the graph.
As a rule, a fixed spread is chosen by confident traders with a large account size. It is profitable
for them. Those who are just beginning to trade forex, they usually open small accounts. And as
we have already said, in most cases the broker gives the trader a low fixed spread, if he has a
standard or a VIP account. Therefore, beginners use a floating spread first. It is profitable for
them, because they can earn income on cent accounts. The more you have an account opened,
the more profitable it is to work with brokers who have a fixed spread. In rare exotic currency
pairs, it is higher than for a popular pair, for example, EUR / USD.
A floating (variable) spread is an economy, but at the same time a risk. Its shortcomings are
sharp jumps and change points depending on the amount of the transaction. And sometimes it
happens for no apparent reason. Here you have to constantly monitor before closing a deal this