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Is fixed spread better than variable spread?


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#1 kadus32

kadus32

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Posted 25 June 2018 - 05:35 AM

There are two types of spread offered by brokers when people open an account with them. The fixed spread and the variable spread. It is the money is the money that broker takes from you when you place your trades. This market is uncertain and the brokers do not know if you are going to make a profit or lose your account. The best way to meet their goal is to charge money before you place the trades. The spread is the reason our trades always starts with some down movement whenever we open them at the present price. This amount as it needs to be overcome if we want to make money. Most people in this industry are divided into two groups when it comes to favoring one spread. Some say the fixed spread is best as it leaves the people trading in any volatilities with the same amount of money. Some say the variable spread is better as it adjusts with the volatility of the trend. This article will try to explore all the good sides and the bad sides of them and you will decide what is best for you. Keep one thing in mind that it is always the strategy and the traders’ hard work that give the profit. You may trade with any of them but if you do not work, you cannot make a profit.

 

Importance of regulated broker

Before we dig deep, we want to highlight some of the key factors for choosing a reputed broker. You might save a huge amount of money in the long run by trading the market with the low-class broker. But this doesn’t mean every successful trader in the United Kingdom is trading the market with the average brokerage firm. In fact, they are always looking for the best broker since they will have access to quality service. Most of the time, the trading cost with the elite class broker is a little bit high. But if you can trade the market with a high level of precision, you should never worry about trading cost.

 

So how do we find a reputed broker? To be honest, things have become very easy due to advanced technology. If you do some research you will find many quality brokers. Depending on your trading style you can open an online trading account with the reputed broker and start making money. But make sure your broker is well regulated and has a good reputation in the online trading industry.

 

The fixed spread

First, we will talk about the fixed. It is very helpful in volatilities when the trends are moving up and down. You know you will have to give the same amount of the other trends but you have the chance to make more profit. It does not change the trend and it is ideal for people who trade in short-term strategy. It also keeps you tension free as you know you will be charged the same amount in every trades. The fixed spread also has some bad sides as it can become a burden on smooth trends. Giving a high amount may be accepted in volatile patterns but in normal patterns, it may not be accepted by many people.

 

The variable spread

It changes with the conditions of market trends. Many people like it as it charges low amount of money for smoother trends. If you like to trade in smooth trends and avoid volatility, trading with the fixed spread is best for you. You will give the same money for every trades. It is not decided what is best as many people have different selections. If you want to trade with different spreads, trade in demo accounts and see how much difference they make in your profit. Trade with the spread that you find profitable for your investment and trading.