Best Low Spread Forex Brokers Reviewed for 2024 – Cheapest Brokers Compared

Inexperienced forex traders will often focus on the commission when assessing fees. But the spread is equally as important, as this is an indirect fee charged on both buy and sell orders.

In this guide, we reveal the twelve best low spread brokers for 2024. Not only do we rank brokers based on average spreads, but also commissions, payment types, supported markets, leverage limits, and much more.

Top 12 Low Spread Brokers Shortlisted

The twelve best low spread brokers are ranked in the list below:

  1. eToroGlobal forex broker with spreads starting from 1.0 pip and low overnight fees. Trade 55 forex pairs with tools like copy trading, sentiment analysis, and 400:1 leverage.
  2. Plus500 – Regulated and authorized by multiple financial authorities Plus500 offers some of the lowest commissions on the platform. The leverage depends on the margin, but there are forex futures, including majors like the Australian Dollar and exotic futures like the Mexican Peso.
  3. XTB: XTB is a low spread broker that supports 48 currency pairs. EUR/USD can be traded with spreads of 1.3 pips. No commissions are charged and forex can be traded 24/5. XTB offers leverage of up to 1:500 when trading major forex pairs.
  4. IUX: IUX is a low spread forex broker with a reputation for user friendliness that is suited to beginners. Alongside forex spreads starting from 0.0 pips, IUX also offers CFD trading on commodities, indices, shares and cryptocurrencies.
  5. Trade Nation: Trade Nation is a global forex broker that supports MT4. It has two account types, each offering different fees. The Raw Spread account offers spreads from 0.0 pips and commissions of $3.50 per slide. The Standard account offers 0% commission with variable spreads. Leverage of up to 1:500 is available.
  6. AvaTrade: Trusted forex broker AvaTrade is regulated in nine different countries. It offers 0% commission trading on all supported markets, including forex. Spreads start from 0.9 pips when trading EUR/USD.  AvaTrade supports MT4 and MT5 – plus its own proprietary trading platform.
  7. Pepperstone: Pepperstone’s Razor account offers 0.0 pip spreads, plus commissions of $3.50 for every lot traded. Alternatively, casual traders can opt for the Standard account, which offers 0% commission and spreads from 0.7 pips. There is no minimum deposit requirement at Pepperstone.
  8. Libertex: This regulated forex broker offers EUR/USD spreads from just 0.2 pips. No commissions are charged and the minimum deposit is just $10. Moreover, eligible traders can apply leverage of up to 1:999 on major currency pairs. Libertex also supports stocks, commodities, and cryptocurrencies.
  9. Skilling: Skilling is a commission-free broker that offers EUR/USD spreads from 0.7 pips. Those on a premium account can lower their spreads to 0.1 pips, but will pay a $35 commission for every $1 million traded. Skilling offers retail clients leverage of up to 1:30 when trading major forex pairs.
  10. IG: This forex broker will appeal to US clients who want to trade in a regulated environment. IG supports over 80 forex pairs and EUR/USD spreads start from 0.8 pips. In addition to fast execution speeds, IG is popular with technical traders. Its native trading suite offers technical indicators, signals, real-time charts, and custom order types.
  11. Forex.com: Founded in 2001, Forex.com is an established online broker that supports over 80 currency pairs. Its Standard account offers 0% commission trading and EUR/USD spreads from 0.7 pips. Forex.com has its own proprietary trading platform, available via web browsers and a mobile app. MT5 is also supported.
  12. Capital.com: This popular forex broker supports 125 currency pairs, including dozens of exotics. There are no commissions to pay and EUR/USD spreads start from 0.6 pips. Capital.com offers leverage of up to 1:30 on major currency pairs. Traders can also speculate on cryptocurrencies, stocks, indices, and other CFD assets.

This low spread forex broker list covers the top eleven providers, which we review in the following sections.

Best Low Spread Forex Brokers Reviewed

Read on to discover what the best lowest spread forex brokers offer in 2024. Our reviews not only cover spreads but also other important metrics. For instance, supported markets, minimum deposit requirements, and regulations.

1. eToro – Best Low-spread Broker with Trading Fees from 1.0 Pips

eToro is a popular low-spread forex broker offering forex trading fees starting at only 1.0 pip for the popular EUR/USD trading pair. It backs up these low spreads with overnight fees starting at only $0.00000227 per sell and $-0.00008473 per buy. 

There are no deposit fees for bank transfers, debit cards, or e-wallets making it one of the most competitive platforms on the market.

eToro FX pairs

Beyond just offering low fees, there’s a lot more for forex traders to like about eToro. This forex broker has its own powerful trading platform that makes it easy to monitor a wide range of trading pairs at once. You can set up alerts, save custom chart layouts, and find trading opportunities using dozens of built-in technical indicators.

On top of that, eToro helps you track market sentiment for each forex pair it offers. You can see at a glance whether other traders on eToro are buying or selling and incorporate that information into your trading strategy.

You can also mimic the moves of experienced forex traders on eToro thanks to its copy trading feature. This is a great way to implement different forex trading strategies in your portfolio without having to watch the market all day. Regulated by leading bodies in the UK and Europe, eToro is the perfect platform for beginner and investor alike.

Broker Min. EUR/USD Spread Min. GBP/USD Spread
eToro 1.0 pips 2.0 pips

Pros pros

  • Spreads from 1.0 pips for forex CFDs
  • Low overnight fees
  • Powerful charting platform
  • Tracks trader sentiment for forex pairs
  • Supports forex copy trading

Cons cons

  • Minimum deposit to open an account
  • $10 per month fee after 12 months of inactivity

76% of retail CFD accounts lose money – your capital is at risk.

2. Plus500 – Regulated Futures Broker With Low Commission

Plus500 offers some of the lowest commissions on the platform. Moreover, Plus500 waives deposit and withdrawal fees, and there are no fees for routing as well as no platform fees, which are often charged by other brokers.

This makes Plus500 an excellent choice for active future traders. There are 13 forex futures to trade, from Micro AUD/USD and Micro GBP/USD to Mexican Peso and Euro FX, with leverage that depends on the margin.

Plus500 Site

If you want to take a more cautious approach and diversify your investments, choose from over 50 future contracts. Add popular Equity Indices like E-mini S&P MidCap 400 or Micro E-mini S&P 500 to your portfolio or trade crypto futures and metals such as gold, silver, and more. You can also trade agriculture futures and interest rates as well.

To keep your mind at ease, Plus500 is one of the futures brokers that is regulated by multiple financial authorities. Because of that, there are over 25 million users from 50 countries that use the platform daily.

Broker Min. EUR/USD Spread Min. GBP/USD Spread
Plus500 no spread on the futures platform no spread on the futures platform

Pros pros

  • Regulated futures broker with licenses in multiple countries
  • Low commissions
  • Leverage depends on the margin
  • Fee-free deposits and withdrawals

Cons cons

  • No MT4 or MT5 platform support

Trading with leverage comes with a high risk and may not be suitable for everyone.

3. XTB – Low Spread Broker Offers 48 Currency Pairs

XTB is one of the best low spread brokers for day traders. Not only does it offer competitive spreads but there are no commissions to pay. This is the case for all supported markets. EUR/USD, for example, starts from just 1.3 pips.  Moreover, XTB is suitable for beginners, as there is no minimum deposit requirement.

It is important to note that XTB spreads are variable. This means that spreads will change throughout the day, depending on broader trading commissions. For example, GBP/USD is currently trading with spreads of 1.6 pips, because the markets are closed. However, this is reduced to 1.3 pips during standard market hours. XTB is also one of the best low spread brokers for obtaining high-leverage limits.

XTB forex spreads

Eligible traders can buy and sell forex pairs with leverage of up to 1:500. This translates to a margin requirement of just 0.2%. In addition to forex, XTB supports thousands of other financial instruments. This includes everything from stocks and indices to cryptocurrencies and commodities. XTB has its own native trading platform – xStation 5. This offers plenty of advanced trading tools, including technical indicators.

Broker Min. EUR/USD Spread Min. GBP/USD Spread
XTB 1.3 pips 1.3 pips

Pros pros

  • 0% commission on all supported markets
  • EUR/USD spreads start from 1.3 pips
  • One of the best high-leverage brokers (up to 1:500)
  • No minimum deposit requirement
  • Regulated in multiple jurisdictions

Cons cons

  • Variable spreads are wider outside of standard market hours

Forex and CFDs are leveraged products and can result in losses that exceed your deposits. Please make sure you fully understand all risks.

4. IUX – Low Latency Forex Platform Offering Low Spread and Zero Commission Trading

IUX is a market-leading, low-spread digital trading platform that focuses primarily on forex trading. Alongside forex trading, the platform also offers CFD trading on a variety of international markets including stocks, indices, cryptocurrencies, and commodities.

The platform is renowned for its low-spread forex trading which provides users with access to over 60 currency markets and spreads starting from as low as 0.0 PIPs. Such a diverse mix of liquidity proprietary ensures that tight spreads are always available.

IUX mobile

More than $1.5 billion worth of CFD trades are processed every day showcasing IUX’s institutional-grade platform which has uninterrupted access to deep levels of liquidity.

IUX boasts some of the fastest order execution on the market today thanks to the use of low latency fiber optic and an in-house Equinix LD4 server. This ensures that the average trade execution speed remains under 30ms. For those who want even faster trade execution speeds, IUX also provides access to Low Latency Collocated VPS free of charge.

You can access the IUX platform via desktop or mobile application and with support for over 10 languages and 35,000 global installations to date, it is easy to see why IUX has become so popular in a relatively short space of time.

Broker Min. EUR/USD Spread Min. GBP/USD Spread
IUX 0.0 pips 0.0 pips

Pros pros

  • Access more than 250 financial products
  • 60+ currency markets available to trade
  • Low latency ensures super fast order execution
  • Deep liquidity guarantees trades will always execute

Cons cons

  • Only 15 cryptocurrencies available

5. Trade Nation – Trade Forex From 0.0 Pips and a $3.50 Commission per Slide          

Trade Nation is one of the best low spread brokers for professional traders. Its Raw Spread account offers institutional-grade pricing, with spreads on EUR/USD starting from 0.0 pips. To access the best spreads in the markets, Trade Nation users pay $3.50 per lot. This is charged at both ends of the trade. This account type requires a minimum deposit of $1,000.

The other option is to open a Standard account. This comes without a minimum deposit requirement and no trading commissions are charged. But do expect higher spreads, which will vary depending on market conditions. Both account types offer ultra-fast execution speeds and access to deep liquidity. Moreover, Trade Nation users trade on the MT4 platform. All device types are supported.

Trade Nation review

Trade Nation offers leverage of up to 1:500 on major forex pairs. But some traders will be offered much lower limits, especially those based in the UK and the EU. We also like that Trade Nation is heavily regulated. It holds licenses in multiple countries, including the UK, Australia, South Africa, Seychelles, and the Bahamas. Trade Nation offers a free demo account for traders who want to test the broker before making a deposit.

Broker Min. EUR/USD Spread Min. GBP/USD Spread
Trade Nation 0.0 pips 0.0 pips

Pros pros

  • Raw Spread accounts offer minimum spreads of 0.0 pips
  • A commission of $3.50 per traded lot is reasonable
  • Trade forex with leverage of up to 1:500
  • Regulated in the UK, Australia, South Africa, and other jurisdictions

Cons cons

  • A minimum deposit of $1,000 is required on the Raw Spread account
  • Requires users to register an account to view live forex prices and spreads

6. AvaTrade – Established Forex Broker With EUR/USD Spreads Starting at 0.9 Pips        

AvaTrade is an established forex broker that also supports other leveraged markets. This includes stocks, indices, commodities, cryptocurrencies, and options. When trading EUR/USD, AvaTrade offers spreads of just 0.9 pips. USD/JPY and AUD/USD can be traded with spreads of 1 pip and 1.1 pip, respectively. GBP/USD is slightly less competitive at 1.5 pips.

Nonetheless, AvaTrade doesn’t charge trading commissions on any of its supported markets. In addition, AvaTrade offers eligible clients leverage of up to 1:400 on major and minor forex pairs. Exotics can be traded with leverage of up to 1:100. AvaTrade supports multiple trading platforms, including MT4 and MT5. It also offers a native web trading platform.

AvaTrade review

Users can also trade via the AvaTrade mobile app for iOS and Android. AvaTrade is also popular for its regulatory framework. It is authorized and licensed in nine different countries. We also like that AvaTrade offers fee-free deposits and withdrawals. Accepted payment methods include debit/credit cards and bank wires. The minimum deposit is $100, or the currency equivalent.

Broker Min. EUR/USD Spread Min. GBP/USD Spread
AvaTrade 0.9 pips 1.5 pips

Pros pros

  • Regulated forex broker with licenses in nine different countries
  • No commissions are payable on any supported markets
  • EUR/USD spreads start from 0.9 pips
  • Fee-free deposits and withdrawals

Cons cons

  • Supports DupliTrade – but this requires a minimum deposit of $5,000

7. Pepperstone – 0.0 Pip Spread Accounts With Deep Liquidity     

Pepperstone, used by more than 400,000 traders globally, offers some of the lowest spreads in the market. Those opening a Razor account will secure minimum spreads of 0.0 pips on many pairs. This includes EUR/USD, GBP/USD, USD/JPY, AUD/USD, and USD/CHF. To get the best spreads possible, users will need to trade during peak market hours.

The Razor account comes with commissions of $3.50 per traded lot. On pairs denominated in GBP and EUR, the commission amounts to £2.25 and €2.60 respectively. Pepperstone also offers Standard accounts that come without commissions. But the spread will be much higher. For instance, EUR/USD and GBP/USD start at 0.7 and 0.9 pips. This is still very competitive nonetheless.

Pepperstone review

We also like that Pepperstone allows traders to deposit any amount of their choosing – no minimums apply. No deposit fees are charged either. Accepted payment types include debit/credit cards, PayPal, and bank wires. All deposit methods are processed instantly apart from bank wires.

Broker Min. EUR/USD Spread Min. GBP/USD Spread
Pepperstone 0.0 pips 0.0 pips

Pros pros

  • Forex spreads from 0.0 pips on the Razor account
  • No minimum deposit required
  • Commission-free accounts are also available
  • Regulated with tier-one licensing bodies

Cons cons

  • Only supports third-party trading platforms

8. Libertex – Minimum Deposit of $10 and Leverage of up to 1:999     

Libertex is a popular CFD broker that supports forex, stocks, indices, and commodities. It also supports some of the best cryptocurrencies to trade, such as Bitcoin, Ethereum, BNB, Litecoin, and Dogecoin. Forex traders have dozens of currency pairs to choose from across the majors, minors, and exotics. There are no trading commissions to pay.

Moreover, Libertex offers spreads of just 0.2 pips on EUR/USD. One of the best features of Libertex is that it offers leverage of up to 1:999 on major forex pairs. This means for every $999 traded, a margin balance of just $1 is required. Limitations will apply depending on the location of the trader.

Libertex review

In terms of trading platforms, Libertex supports MT4 and MT5. It also has its own native platform for web browsers and smartphones. First-time users can test Libertex via its free demo account, which comes with $50,000 in virtual trading funds. Real money accounts require a minimum deposit of just $10.

Broker Min. EUR/USD Spread Average GBP/USD Spread
Libertex 0.2 pips 0.9 pips

Pros pros

  • EUR/USD can be traded from just 0.2 pips
  • All markets are commission-free
  • Minimum deposit of just $10
  • Major forex pairs can be traded with leverage of up to 1:999

Cons cons

  • Spreads are volatile outside of standard market hours

9. Skilling – Premium Forex Accounts Come With Minimum Spreads of 0.1 Pips        

Skilling is the final option to consider on this list of the best low spread brokers. It offers two account types to choose from. Its Premium account offers minimum spreads of just 0.1 pips on EUR/USD. This comes with a commission of $35 for every $1 million traded. Moreover, the Premium account has a minimum deposit requirement of €5,000.

As such, the Premium account likely won’t be suitable for beginners. That said, Skilling also offers a Standard account. Not only does it come with a minimum deposit of €100 but no trading commissions are charged. But the minimum spread on EUR/USD has increased to 0.7 pips.

Skilling review

Both Skilling accounts offer access to 73 forex pairs, alongside indices, stocks, cryptocurrencies, and commodities. Retail clients can trade major pairs with leverage of 1:30. This is increased to 1:200 for professional traders. We like that Skilling supports multiple trading platforms. This includes MT4 and cTrader. Skilling also offers a native trading suite, available on web browsers and a mobile app for iOS and Android.

Broker Min. EUR/USD Spread Min. GBP/USD Spread
Skilling 0.1 pips 0.4 pips

Pros pros

  • Premium accounts offer minimum spreads of 0.1 pips
  • Covers a wide range of assets – including forex, stocks, and indices
  • Commission-free accounts are also available
  • €1 million insurance for each trader in the event of a brokerage collapse

Cons cons

  • Leverage capped at 1:30 for retail clients

71% of the retail investors lose money when trading with this CFD provider.

10. IG – Trusted Low Spread Broker for US-Based Clients       

IG is one of the best low spread brokers for US-based clients. It is registered with the CFTC and NFA and supports more than 80 currency pairs. Moreover, IG is popular for its super-fast execution speeds and high-level trading dashboard. The latter supports dozens of technical indicators, chart drawing tools, and customer order types.

The IG trading suite also supports breaking news, direct from Reuters. In terms of fees, EUR/USD spreads can be traded from 0.8 pips. There are no commissions to pay when trading forex. US clients can also trade forex with leverage. EUR/USD requires a minimum margin requirement of just 2%. GBP/USD and USD/CHF require a slightly higher margin at 5%.

IG review

IG offers a fast account opening process. In most cases, US clients are verified instantly. The main drawback is that US clients cannot trade other assets on IG. Those based in other countries will have access to thousands of stocks, funds, commodities, indices, and other popular markets.

Broker Min. EUR/USD Spread Current GBP/USD Spread
IG 0.8 pips 1.6 pips

Pros pros

  • Top-rated forex broker for US clients
  • Supports multiple trading platforms – including MT4
  • Commission-free forex trading and spreads from 0.8 pips
  • Great customer support

Cons cons

  • Debit/credit card fees of up to 1%

11. Forex.com – Regulated Forex Broker Offering Over 80 Pairs      

Forex.com is a regulated forex broker that was founded in 2001. It supports more than 80 currency pairs and offers competitive pricing. That said, spreads often depend on the trader’s location and account type. For instance, US clients can open a Direct Market Access (DMA) account, which offers institutional-grade spreads alongside a small commission.

While non-US clients are limited to Standard accounts, which come with higher spreads but without commissions. On the Standard account, EUR/USD can be traded with spreads of just 0.7 pips. But spreads are variable, so expect volatility. Nonetheless, we like that Forex.com supports MT5, which comes packed with trading and analysis tools.

Forex.com review

Forex.com also has its own trading platform, accessible via browsers, desktop software, and an app for iOS and Android. Non-US clients have access to thousands of other assets, backed by leveraged CFDs. This includes commodities, stocks, indices, and cryptocurrencies.

Broker Min. EUR/USD Spread Min. GBP/USD Spread
Forex.com 0.7 pips 1.1 pips

Pros pros

  • Established forex broker that was founded in 2001
  • Supports more than 80 forex pairs
  • US clients have access to DMA accounts
  • Standard accounts are commission-free

Cons cons

  • Non-forex assets are backed by CFDs – so US clients can’t trade them

12. Capital.com – 0% Commission Forex Trading on 125 Currency Pairs         

Capital.com is one of the best FX low spread brokers for diversification. 125 forex pairs are supported, which is more than most brokers in this industry. This includes dozens of exotic pairs, which will appeal to high-risk traders. All markets supported by Capital.com can be traded at 0% commission. Moreover, spreads on EUR/USD start from just 0.6 pips. Spreads are variable, so will change as per market conditions.

Capital.com has its own web trading platform and a native app for iOS and Android.  Its trading suite supports over 70 technical indicators, economic news, multi-chart toggling, and personalized watchlists. Capital.com supports leverage of up to 1:30 when trading major currency pairs. This is reduced to 1:20 when trading minors and exotics. Traders might wish to start with the Capital.com demo account.

Capital.com forex review

This comes pre-loaded with $1,000 in virtual funds and it tracks live market conditions. Real money accounts require a minimum deposit of just $20. Debit/credit cards and e-wallets are supported. But bank wire deposits require a minimum of $500. There are no deposit or withdrawal fees. We also like that Capital.com supports other leveraged markets. This includes more than 2,800 stocks from multiple international exchanges. In addition, Capital.com supports cryptocurrencies, commodities, and indices.

Broker Min. EUR/USD Spread Min. GBP/USD Spread
Capital.com 0.6 pips 1.3 pips

Pros pros

  • Minimum EUR/USD spreads of just 0.6 pips
  • No commissions to pay on any supported markets
  • 125 forex pairs supported – including dozens of exotics
  • Native trading platform comes with plenty of analysis tools
  • No deposit or withdrawal fees

Cons cons

  • Bank wires require a minimum deposit of $500

Best Low Spread Brokers Compared

Comparing spreads, commissions, and other important metrics can be a daunting task.

Therefore, the best low spread brokers are summarized in the table below.

Broker Pairs EUR/USD Spread Account Types Account Fees Max. Leverage
eToro 55 1.0 pips Standard – 0% commission trading $10 per month fee after 12 months of inactivity 1:400
Plus500 +60 0.00012 Individual trading accounts No fees 1:30
XTB 48 From 1.3 pips Standard – 0% commission trading €10/month inactivity fee after 1 year 1:500
IUX 60+ From 0.0 pips 0% commission trading No fees 1:3000
Trade Nation Not stated From 0.0 pips Standard – 0% commission trading / Raw – $3.50 per lot Not stated 1:500
AvaTrade 53 From 0.9 pips Standard – 0% commission trading $50/quarter inactivity fee after 3 months 1:400
Pepperstone 60+ From 0.0 pips Standard – 0% commission trading / Razor – $3.50 per lot None 1:200
Libertex 50 From 0.2 pips Standard – 0% commission trading 2.5% on debit/credit card payments. E-wallet payments are charged between 1.9% and 4%. 1:999
Skilling 73 From 0.1 pips Standard – 0% commission trading / Premium – $35 per $1 million traded E-wallet payments are charged up to 2.9%. Bank wire withdrawals cost up to $25. 1:30
IG 80+ From 0.8 pips Standard – 0% commission trading Deposit fee of 1% (Visa) and 0.5% (MasterCard). $18/month inactivity fee after 2 years 1:50 (US)
Forex.com 80+ From 0.7 pips Standard – 0% commission trading / US Clients have access to DMA accounts $10/month inactivity fee after 1 year 1:50 (US)
Capital.com 125 From 0.6 pips Standard – 0% commission trading None 1:30

What is a Spread in Trading?

In simple terms, the spread is the difference between the ‘bid’ and ‘ask’ prices of a forex pair. Some brokers will display this as the ‘buy’ and ‘sell’ price. Either way, this is an indirect fee that is charged when entering and exiting a position.

Crucially, this is one of the most common ways that forex brokers make money. Irrespective of which way the market moves, the broker will make a small profit on each buy and sell order.

eToro forex trading

In forex, spreads are priced in PIPs (percentage in point). The reason for this is that currency prices – especially majors, move by micro-fractions.

For instance:

  • Let’s suppose that EUR/USD has a bid price of 1.0922
  • Simultaneously, the ask price of EUR/USD is 1.0923
  • The difference between the two is 0.0001
  • So that’s a spread of 1 pip

This means that traders will pay 1 pip when opening a position. And if the spread remains the same when cashing out, they will again pay 1 pip.

It is important to note that most forex brokers highlight the ‘minimum’ spread that traders can access. But spreads are usually variable, meaning they change as each second passes. The minimum spread is usually available during peak market hours for the respective pair.

How are Forex Spreads Calculated?

To calculate the spread, traders first need to know what the bid and ask prices are for the forex pair. In most cases, forex brokers quote prices with four decimal places. For instance, the bid price of GBP/USD might be 1.2801. The only exception here is pairs that contain the Japanese yen, which have two decimal places.

Nonetheless, after the bid and ask prices are known, traders can calculate the spread in pips.

For example:

  • Pair: EUR/USD
  • Bid Price: 1.1005
  • Ask Price: 1.1000

In the above example, the difference between the bid and ask prices is 0.0005. Now, to convert this into pips, the decimal place needs to be moved four digits to the right. So, in this example, the spread is 5 pips.

However, some brokers with the lowest spreads use five decimal places (and three on JPY pairs). The good news is that the fourth decimal place still represents the pip.

For example:

  • Pair: EUR/USD
  • Bid Price: 1.10015
  • Ask Price: 1.10005

In the above example, the difference between the bid and ask prices is 0.00010. As such, the spread is 1 pip. If the difference was 0.00015, the spread would be 1.5 pips, and so on.

Do I Need to Calculate the Spread?

  • It is crucial that forex traders know what spreads they are paying.
  • Otherwise, traders won’t be able to accurately log their profits and losses.
  • Fortunately, many forex brokers display the spread in real-time.
  • This means that traders do not need to calculate the spread themselves.

What is Considered a Low Forex Spread?

The competitiveness of a forex spread varies depending on the pair. A good starting point is to assess EUR/USD, as this is the most traded currency pair globally. Moreover, forex brokers usually offer their most competitive spreads on EUR/USD. This is because EUR/USD attracts the most liquidity and lowest volatility levels.

In most cases, an EUR/USD spread of under 1 pip would be considered competitive. That said, traders also need to factor in another trading fee – commissions.

For example, some forex brokers offer spreads of 0.0 pips on EUR/USD. However, traders will need to pay a commission to access spreads this low. This is usually about $3.50 for each currency lot traded ($100,000). At the other end of the scale, some forex brokers offer 0% commission trading. But equally, spreads will be less competitive.

Commission-Free or Low Spreads: Which is Better?

Some forex brokers will offer a choice of two account types:

  • 0% commission trading with higher spreads
  • 0.0 spreads with a commission per slide

The best option ultimately depends on trading volumes. For example, those trading larger amounts will be better suited for a 0.0 spread account, with a small commission. However, casual traders are better suited for 0% commission accounts with a slightly higher spread.

Best Times to Trade Forex for Low Spreads

We mentioned earlier that forex brokers usually quote the ‘minimum’ spread that they can offer. But this won’t always be available, as spreads are variable. This means that outside of market hours, traders should expect less competitive spreads.

The most competitive spreads can be accessed during peak market hours. But this will depend on the pair being traded.

  • For example, the best time to trade GBP/USD is between 8 a.m. and 12 p.m. (EST).
  • During these hours, both the UK and US markets are open.

Finding Forex Trading Overlaps

Traders should do some research on the time zones applicable to their preferred pairs. For example, those trading AUD/JPY should consider what times the Australian and Japanese markets open, and when they overlap.

The overlap is the best time to trade the respective pair, as both markets are open. Not only will this ensure the lowest spreads but the most liquidity.

Other Fees to Consider When Trading Forex

While the spread is an important trading fee to assess, other charges should also be considered.

This includes:

Commissions

Some forex brokers charge commissions on forex trades. This can be charged in many different ways.

For example, Trade Nation charges a $3.50 commission for every one lot traded. This means that every time the trader buys or sells $100,000 worth of currencies, they will pay Trade Nation $3.50.

Other forex brokers charge a percentage-based fee. For example, suppose the broker charges 0.5% per slide. The trader enters a $10,000 position, so they pay a commission of $50. When they exit the position, it’s worth $12,000. In this instance, the trader pays a commission of $60.

Overnight Financing

Forex traders also need to pay overnight financing fees when positions are kept open past standard market hours. This is otherwise known as a swap fee.

Overnight financing represents the cost of borrowing capital from the forex broker. After all, currency pairs are traded in lots. So, if the trader doesn’t trade an entire lot (e.g. $100,000), part of the position is being funded.

Fortunately, overnight financing won’t apply to day traders. This is because day trades close positions before the market closes.

Payment Fees

Some forex brokers charge payment fees. This might be on deposits and/or withdrawals. Fees can also depend on the payment method.

For example, Skilling charges up to 2.9% when depositing or withdrawing funds with an e-wallet. But debit/credit card payments are fee-free.

Inactivity Fees

Even the best low spread brokers charge inactivity fees. This is usually charged if the trader doesn’t place any orders for a certain number of months.

For instance:

  • AvaTrade charges $50/quarter after three months of inactivity.
  • Forex.com charges $10/month after 12 months of inactivity.

The best way to avoid inactivity fees is to withdraw the account balance in full. The broker won’t be able to charge anything if there isn’t an active balance.

Forex Account Types Spreads

Some forex brokers offer multiple accounts to choose from. This will determine the spread and commission.

In most cases, the trade can choose from the following:

  • A forex account that offers 0% commission trading, but higher spreads.
  • A forex account that offers low or even zero spreads, but a flat commission.

For example, Pepperstone offers both of the above account types. Its Standard account offers 0% commission trading, with a minimum spread of 0.7 pips. Its Razor account offers spreads from 0.0 pips, with a commission of $3.50 for each lot traded.

As we briefly mentioned earlier, the best account type will depend on the trader’s profile. For example, those trading with large amounts will be better suited to a low spread account with a small commission. After all, even a slight change in the spread can have a major impact when trading large amounts.

On the flip side, those trading smaller amounts will be better off with a 0% commission account, and slightly higher spreads. This is because even a small commission can make the trade unviable. In this instance, XTB is the best low spread broker. It has a spread of 1.3 pip on EUR/USD and doesn’t charge commissions.

Conclusion

In choosing a low spread broker, traders can reduce their trading fees when buying and selling forex pairs. Importantly, traders should strike the perfect balance between low spreads and competitive commissions.

eToro fits the bill perfectly – it offers 1.0 pips on EUR/USD, charges low overnight fees, and supports forex copy trading. You can apply up to 400x leverage on your trades and use a powerful charting platform to execute trades.

76% of retail CFD accounts lose money – your capital is at risk.

References 

https://www.fidelity.com/insights/investing-ideas/glossary-large-cap

https://coinmarketcap.com/currencies/bitcoin/

https://www.bloomberg.com/quote/EURUSD:CUR

https://www.cnbc.com/quotes/GBP=

https://markets.ft.com/data/currencies/tearsheet/summary?s=audjpy

https://www.ig.com/en/help-and-support/cfds/fees-and-charges/why-is-overnight-funding-charged-and-how-is-it-calculated-

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Kane Pepi
Editor

Kane Pepi is an accomplished financial and cryptocurrency writer who has an extensive portfolio of over 2,000 articles, guides, and market insights. With his expertise in specialized subjects such as asset valuation and analysis, portfolio management, and financial crime prevention, Kane has built a reputation for providing clear explanations of complex financial topics. He holds a Bachelor's Degree in Finance and a Master's Degree in Financial Crime, and is currently pursuing his Doctorate degree, which focuses on investigating the complexities of money laundering in the cryptocurrency and blockchain technology sectors. Kane's wealth of knowledge and experience in the field make…