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9 Of Leading Low Spread Forex Brokers 2020 [Tight Spread Brokers]
2020-04-14 33082

Spread, as the cost factor, is important for forex traders. Lower spread means smaller costs for traders. Also, lower spreads usually represent less volatility, and fewer prices move.

If you are a beginner or trade frequently on the forex market, selecting the forex brokers with low spreads may be good for you.

We have handpicked 9 of the regulated forex brokers with the tight spread in the industry today. Some of the brokers are Australia located, some of which are from the UK’s or other countries. Remember to find out if the forex brokers are acceptable in your country.


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What Does A Low Spread Broker Mean?

The spread is the main cost of opening a trading position in the forex. It means the small difference between the Bid and Ask prices.  A low spread in forex is one that reflects the industry average for the specific instrument or currency pair, or one that is even cheaper than the average. 

Therefore, when determining whether a broker charges the lowest spreads, you need to know the average rates for the specific pair. 

To save you from constant calculations, the low spread forex brokers charge between 0.1-1 pips for all major currency pairs, 1-3 pips for most crosses, and 1-3 pips for the popular commodities. These are the average spreads you can expect during regular trading hours from the tight spread forex brokers. 

The spreads may widen briefly at the close of the market or during the release of high impact news, but 95% of the time, they will remain low.

Keeping An Eye On Changes In The Spread

As we have mentioned above, the spreads can change at specific periods, even when trading with the lowest spread forex brokers. Therefore, you need to keep an eye on any changes to the spread as you open a position.

You can expect changes to the spread on a currency pair or instrument if there is a major economic release scheduled on the pair. Many brokers will widen the spreads a few seconds to the release time, and it will remain wide for at least two minutes after the release. To keep an eye on major impact releases, you can use websites such as Forex Factory or FX Street.

Spreads also widen around the New York close. This is the popular “market close” time in forex trading. Spreads begin to normalize an hour into the Tokyo session.

You can use special scripts or indicators to keep an eye on changes in spreads depending on your broker’s platform. Alternatively, you can simply watch the difference between the Bid and Ask price before you open a position.

9 Of The Lowest Spread Forex Brokers For 2020

Next, I will show you some regulated forex brokers with low spreads, along with their regulation body, rates, security, trading platform, etc.

Please note that the trading conditions of the following broker may change over time. Past performance is no guarantee of future results.  The list of brokers is just for reference. There are still many other good brokers outside our list and they may be more suitable for you than anyone on our list.

You need to do more research on your own to find out the brokers that suit your personality.

These are the top 9 low spread forex brokers from my side (in no particular order):

1. Mitrade

2. Pepperstone

3. IC Markets

4. Darwinex

5. Axitrader

6. XM

7. FX Pro

8. Plus500

9. HotForex

1. Mitrade

Mitrade is an Australian based forex and CFD broker offering a no-frills trading experience to all classes of forex traders. You can trade on more than 100 financial instruments via it’s simplified and intuitive web-based trading platform or mobile app. The spread of Mitrade across the major pairs can drop to 0.5 during the major trading sessions.

● Office Headquarters: Australia

● Max Leverage: 1:200

● Minimum Deposit: $10

● Platforms: Mitrade Web and Mobile App

● Instruments:  Currencies, Commodities, Indices, Cryptocurrencies, Stocks

● Regulations: ASIC


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2.  Pepperstone

Pepperstone is an Australia-based forex broker offering forex trading solutions for the various levels of traders. The spread of EURUSD on Pepperstone can drop to 0.1 pips. 

● Office Headquarters: Australia

● Max Leverage: 1:500

● Minimum Deposit: $200

● Platforms: Metatrader 4, Metatrader 5 and cTrader

● Instruments:  Currencies, Commodities, Cryptocurrencies

● Regulations: ASIC, FCA

3. IC Markets

IC markets provide more than 200 tradable assets. They appear on this list of low spread forex brokers because the average spread on the most popular instruments is 0.1 pips. IC Markets is also popular for charging zero spreads on some instruments during peak liquidity hours.

● Office Headquarters: Australia

● Max Leverage: 1:500

● Minimum Deposit: $200

● Platforms: Metatrader 4, Metatrader 5 and cTrader

● Instruments:  Currencies, Commodities, Cryptocurrencies, Stocks, Futures, Bonds

● Regulations: ASIC, FCA

4. Darwinex

Darwinex is a UK-based broker that is popular for its twist to social trading. It is a broker and also exchange for investors looking to make money from the trading skills of other people. Darwinex ‘s spreads are variable, the EUR/USD pair was generally 0.2 to 0.3 pips.

● Office Headquarters: United Kingdom

● Max Leverage:  1:200 (for professionals) Minimum Deposit: $500

● Deposit from $500

● Platforms: Metatrader 4 and Metatrader 5

● Instruments:  Currencies, Commodities, Stocks, and Futures

● Regulations: FCA

5. Axitrader

Axitrader is one of the oldest brokers on this list. Based in Australia, they have made a reputation for charging low transaction costs. The average spread you can expect on Axitrader for most popular instruments in 0.5 pips.

● Office Headquarters: Australia

● Max Leverage:  1:500

● Minimum Deposit: $100

● Platforms: Metatrader 4

● Instruments:  Currencies, Commodities

● Regulations: FCA, ASIC, DFSA

6. XM

XM is highly rated in the forex trading world because it provides more than 800 tradable instruments and charges some of the lowest spreads in the industry. On average, you can expect spreads of 0.5 pips on most major pairs.

● Office Headquarters: Cyprus

● Max Leverage:  1:500

● Minimum Deposit: $5

● Platforms: Metatrader 4, Metatrader 5,

● Instruments:  Currencies, Commodities, Indices, Stocks, Metals, Energies

● Regulations: FCA, CySEC

7. FxPro

Since its inception, FxPro has executed over 200 million orders. It is another veteran broker that has grown stronger with each passing year. The average spreads on FxPro for major instruments are as low as 0.5 pips.

● Office Headquarters: Cyprus

● Max Leverage:  1:500

● Minimum Deposit: $100 ($500 for customers in the Middle-East)

● Platforms: cTrader, FxPro Edge, Metatrader 4, Metatrader 5

● Instruments:  Currencies, Commodities, Indices, Stocks, Metals

● Regulations: FCA, CySEC, FSCA, DFSA, SCB

8. Plus500

Plus500 is a popular forex broker in the world. It is no surprise that they are listed on the London Stock Exchange. Traders on Plus500 enjoy low spreads across the major currency pairs, including 0.1 pips on EURUSD. The broker is regulated in most of the major financial hubs around the world.

● Office Headquarters: Israel

● Max Leverage:  1:30

● Minimum Deposit: €100

● Platforms: Plus500 web and mobile apps

● Instruments: Currencies, Commodities, Futures, Stocks, Metals, Cryptocurrencies, Options, ETFs

● Regulations: FCA, CySEC, MAS, IE Singapore, ASIC, FMA, and FSP

9. HotForex

Traders can trade on major pairs with spreads starting from 0.7 pips on HotForex. They also offer a zero spread account for a specific group of clients. There are multiple account options to choose from, so traders have to spend time to find the perfect option.

● Office Headquarters: Mauritius

● Max Leverage:  1:1000

● Minimum Deposit: $5

● Platforms: Metatrader 4

● Instruments: Currencies, Commodities, Futures, Stocks, Bonds, Energies, Metals, Cryptocurrencies

● Regulations: FCA, CySEC, DFSA, FSCA and FSA

We have talked about 9 of the low spread forex brokers from my list, you can choose based on your own preference.

Why You Need Tight Spread Broker?

Tight spreads are very important in retail forex trading for a number of reasons. They include the following:

  Lower transaction costs

Transaction costs are a big deal in forex trading. This is no surprise because most traders want to make as much money as possible on every position opened. When the transaction costs are high, you are already at a disadvantage. Even when the trade goes in your favor, you will make less money in profits. Transaction costs may not be a big deal for smaller retail traders with positions that are worth less than $1 per pip. However, as the trade size increases the cost of the spreads adds up very quickly.

Here’s an example:

Joe trades the GBPJPY on a broker that charges 4 pips as spread while James trades with one of the lowest spread brokers that charges 1 pip as spread on the same pair. They are both day traders that take a minimum of 10 positions per day, and the size of each trade they open is $50 per pip.

Regardless of the profit target, James will save $1,500 every day (4-1x$50x10trades) on spread alone in comparison to Joe. That total balloons to a massive $7,500 over a trading week!

So, savvy traders find brokers that will not put them at a significant disadvantage even before profit and loss from trades are taken into consideration.

  More efficient trading strategies

The spread can determine the level of profitability you enjoy with your trading strategy. Going back to our example above, if both Joe and James expect set automatic profit targets expecting to make 20 pips per trade, James’s trades will be closed as soon as the pair has moved by 21 pips. Joe, on the other hand, will have to wait for the market to move by 25 pips.  Unfortunately, 5 pips movement can take a lot of time in forex!

If your spread is too wide, you may have more near-misses that can turn into losing trades. This will reduce the overall profitability of your strategy.

  More Flexibility in Trade Execution

If your spreads are tight, you can open trades immediately there’s an opportunity in the market. You won’t need to spend too much time on calculating possible costs or worse, passing up the chance of taking the trade because the spread is too high.

Traders on tight spread forex brokers have more flexibility in opening trades because they can open and close positions at very little cost. If you open a trade with 0.6 pips spread and you change your mind about the position after a while (think maybe lack of movement), you will lose less than 1 pip’s worth in transaction costs. 

However, if the spread is 4 pips or higher, you may feel more complicated to wait for the trade to move in your direction first before closing it to avoid losing considerable sums.

How To Start Trading On Mitrade?

If you want a clean and simple trading platform, Mitrade is here for you. You will enjoy a sum of $50,000 virtual money to practice and formulate your best strategies before switching to a live account.

To start trading on Mitrade, follow these steps:

〉 Click to the trading platform

〉 Search the markets you want to trade and select it

〉 Open a Long or Short position

〉 Set up your position size, stop-loss/ take-profit price

〉 Confirm the trade


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Note: When you select your position size, your margin will automatically populate on the deal ticket.

In the end, all trading carries risks. Such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

The content presented above, whether from a third party or not, is considered as general advice only.  This article does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Mitrade does not represent that the information provided here is accurate, current or complete. For any information related to leverage or promotions, certain details may outdated so please refer to our trading platform for the latest details. Mitrade is not a financial advisor and all services are provided on an execution only basis. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks. *CFD trading carries a high level of risk and is not suitable for all investors.  Please read the PDS before choosing to start trading.

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