Forex Trading Spreads
The spread a trader pays is the first value to impact a trades P&L. Before any trade becomes profitable, a trader’s position must first move past the cost of the spread. Access to lower spreads move a trader into a profitable position sooner. Many traditional Market Maker forex brokers proudly advertise their low fixed spreads as being an advantage to traders. Nothing could be further from the truth.
Fixed spreads offer no significant advantage and are subject to broker manipulation such as artificial widening. - a tactic whereby dealing desk brokers manipulate available spreads when client positions move against the broker.
ThinkForex’s ECN/STP execution model offers true market driven spreads. The benefit to every one of our clients is true access to real buying and selling rates and ensures clients are trading under optimal market conditions of supply and demand providing the best available bid/ask rates at any given time.
Our ECN/STP model allows direct access to the largest liquidity pools; the final result of which is low market driven spreads for our clients. We do not compete / trade against our clients or intervene in any way. This grants our clients more advantages over dealing desk market makers and STP only brokers:
* Low market driven spreads
* No limits on Scalping
* No “stop-loss hunting”
* No requites
* No conflict of interest between ThinkForex and our clients
A fixed spread may seem like a good thing when market conditions are not optimal during times of low liquidity or high volatility. The fact is, a fixed spread remains in place even when lower competitive true buying and selling rates are available. When the fixed spread is in place traders lose in the end.
