What are fixed spreads?

Fixed spreads are constant and do not fluctuate in response to market conditions. They are typically wider than moving spreads and are useful for traders who want to know the cost of trading in advance. Fixed spreads, on the other hand, can be disadvantageous during periods of high market volatility because they can widen significantly, resulting in higher trading costs.

As per my knowledge fixed spread refers to a type of spread used in financial trading that remains constant or fixed regardless of market conditions or the level of volatility in the underlying asset.

With fixed spreads you get certainty but lose flexibility. Do you need that. Answer yourself. The more is challenge the higher is potential reward.

As far as I know fixed spread is the difference between the bid and the ask prices that remain fixed even though the prices are changing.

Thank you so much for bringing up this topic and providing an explanation! It's really helpful. By the way, I was wondering if any of you know of a broker that offers fixed spreads? I appreciate any input you may have on this topic. Thanks again!

Fixed price is the difference between ask and bid price.

These idiots from forum-posting services often don't even realise that they've posted 3 same thing 3 times over, in the same thread, but if they're paid by the post (which they are) why would they care?

Mind you, everything the OP, Dittmer, has ever posted in this forum is just pasted in, unaccredited, from the web anyway - so who cares who replies to it?!

A shame that this is what FF has turned into

Hi all, I'm a beginner in forex trading, but I'm trying to enter and understand a bit this world together with a friend of mine.
A few days ago we made a trade setting a SL and even though the market reached the bar we set for profit, we still got a stop due to to high spread and volatility of that market (at least that's the explanation the broker gave us).
So I was wondering, is there a way for a given market and broker to get historical data on spread and volatility, so to be able to run some analysis accounting for that too?

Hi,
In Metatrader 5 you can see some information. Press Ctrl-U, select your symbol, at the top go to bars or ticks, press request.
You may also publish you trade here, symbol, open price, sl, tp, close price, open close time. Or screenshot. We'll take a look.

i understand fixed spread as a fixed fee that need to be paid by traders to enable the liquidity provider to pair their orders. For example, Trader A wants to buy 5 dollars worth of Euros , you have to give your 5 dollars to the liquidity provider including the fee which is the spread so that they can find someone who is willing to sell 5 dollars worth of Euro. This fee also helps them to convert the bought Euro back to your base currency.

You buy and sell at slightly different prices. At any given moment, the price you can buy at and the price you can sell at are different. The difference between these two prices is called the spread. The slightly higher price is called the "Ask" or "Offer". The slightly lower price is called the "Bid". This is why the difference between them is sometimes called the bid-ask spread (or just the spread for short).

If the ask is 1.0370 and the bid is 1.0368, then the spread is 1.0370 - 1.0368 = 0.0002, or 2 pips.

As time passes and the market prices move, the difference between these two prices (the bid and the ask) is not always the same. So the spread can change. Sometimes it gets wider (a bigger difference between the bis and ask), and sometimes it gets smaller (a smaller difference between the bid and ask).

Market makers are traders who "make a market" by being a willing party to take the other side of the market when no one else wants to. As a reward for taking on this risk, market makers get to profit from the bid-ask spread.

Some brokers/platforms will advertise that they have a "fixed spread". This means that they promise to keep the difference between these two the same. If their ask goes up 1 pip, then their bid will also go up 1 pip at exactly the same time. In the example above, with a fixed spread, the difference between the bid and ask would always be 2 pips. If the market is in an up trend and the price moves up 10 pips, then the ask would go from 1.0370 to 1.0380, up 10 pips. But then the bid would have to be 1.0378. It would also have to go up 10 pips so that the difference between the bid and ask is still 2 pips (the fixed spread): 1.0380 - 1.0378 = 0.0002 = 2 pips.

Be careful! If your broker has fixed spreads, it almost certainly means that they are a market maker, which means that they are the ones setting the prices and they are taking the opposite side of all your trades. This means that your broker makes money when you lose money. There is a conflict of interest.

If you trade with an ECN (Electronic Communication Network) broker, that means that the broker is putting your orders through to the real forex market, the global interbank market. In this case, they will charge a commission, but they will not be involved in profiting from the spread. They put your order through to the real market, and it will get matched up with other, opposing orders. It will go through a real market maker, who will likely have a fluctuating spread.

Fluctuating spreads and paying commissions are part of the risks and costs you have to deal with when trading in the true forex. However, it is better than always trading against a market maker who profits from your loss and who can easily manipulate the price however they please. You can start with a market maker because they will let you open an account with much less money, and you won't have to pay commissions. However, you will have higher spreads and there may be some direct manipulation going on.

A fixed spread remains the same regardless of market conditions or stability. Even during periods of high market volatility, the cost of the spread remains constant.

I recommend checking this article to learn about spread: https://insights.primecodex.com/what-is-spread-in-forex-trading/

Well, not necessarily. Brokers can calculate long-term mean spread from prices of their dealers and add some markup above it and offer such options to clients. Bear in mind fixed spread doesn't mean absence of slippage.

If I'm not mistaken, fixed spreads imply steady ratio between bid and ask prices of a certain asset. Usually brokers offer to choose an option whether to trade with fixed spreads or with floating ones. Because of fixed spreads you are deprived of the possibility to maneuver, as they are stable and oftentimes wider than floating.
And, don't forget that if you have a broker which supplies fixed spread account, there may be commissions instead. Brokers also need to cover expenses.

Fixed spreads are not a preferable thing. Although I can see why they may be interesting for traders.
Some raiders don’t pay attention to spreads and are reluctant to follow all the macroeconomic news to avoid crazy volatility.
So they choose fixed spreads and trade with them even though the spreads are not that tight.
mathematician was right by saying that direct execution implies only variable spreads. And the B-book broker can manipulate the quotes in its favor.
It is not necessary it will do so, but…

Fixed spreads is something that I won't consider for my trading.

Fixed spreads are the ones that don't change, huh.
There are floating ones which vary according to the current situation on the market and they can either widen much or be very tight. Fixed ones can't behave this way. There's a fixed amount of pips and very rarely such situations happen when they widen, something very influential should happen. Brokers tend to restrict this type of spreads from any kind of widening or vice versa tightening. So, you just have this number of pips between bid and ask prices and that is it.

Fixed spreads are just average floating spread + some markup from a broker which ensures they will get the same profit on average as if you'd charged on the basis of variable spread. Though there are still some strategies which can benefit from fixed spread but they are hard to discover.