Fixed or Varaible spreads? | Forex Factory

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Fixed or Varaible spreads?

  • #1
  • First Post: Aug 28, 2006 8:51pm Aug 28, 2006 8:51pm
Which is one beter ? Fixed ? Or Varaible? Spread.
What are the advantages\disadvantages for both ?
  • #2
  • Aug 28, 2006 9:05pm Aug 28, 2006 9:05pm
Quoting Houd
Which is one beter ? Fixed ? Or Varaible? Spread.
What are the advantages\disadvantages for both ?
Fixed you know what you are getting. You may overpay in some market conditions and you might save during others. Variable spreads you can possibly get lower than 1 pip spread. Variable spreads are common with ECNs which charge a commission in addition to the spread.

Fixed spread of anything higher than 3 on EUR/USD and 4 on GBP/USD is a rip off. If you could get fixed at 2 and 4 on those pairs I would take it.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #3
  • Aug 28, 2006 9:35pm Aug 28, 2006 9:35pm
Thanks StockKjay,
I amleaning toward the varaible spread. I look at the saml fixed sparead as well
  • #4
  • Aug 29, 2006 7:45am Aug 29, 2006 7:45am
Quoting Houd
Which is one beter ? Fixed ? Or Varaible? Spread.
What are the advantages\disadvantages for both ?
The thing about your question is that it is usually the difference in how the broker operates. If you want to know all those details search around and read all of the broker debate threads. It may or may not matter to you depending on how you trade.
I have both. Each has it's advantages in certain market conditions. For example: I like to trade the pound during the asian market sometimes. The interbank often has a 4 or 5 pip spread on the pound during that time period, plus commission!!! Conversely, my fixed spread broker is 3 pips all the time on the pound. Advantage fixed..... During a busy U.S. or European session the pound may only be 1 pip spread. Also during busy markets, My franc will be be 1 or even 0 pips spread. Often, the spread even inverts! Advantage Variable...........

If you trade longer term, it may not even matter. Just pick the Firm with the best reputation and finacial security. If you are a short term trader, it can make all the difference in the world. Also, many times the variable "ECN type" brokers have alot more flexibility in different types or orders. This can be very helpful with certain strategies. But, if you want simplicity the fixed spread brokers usually have very clear and simple platforms.


Hope that is what you wanted to know.
Profit is where readiness meets Opportunity
  • #5
  • Nov 23, 2006 12:38pm Nov 23, 2006 12:38pm
Do fixed spreads stay fixed through news releases or are they fixed only for normal market conditions?
  • #6
  • Nov 23, 2006 7:46pm Nov 23, 2006 7:46pm
Neither, either, and both.

They both have their advantages and disadvantages. But, it depends on the type of trading system you use. If you trade long term, then, variable might be a great option since you can get good narrow trades and have flexibility on when to enter a trade. Fixed spreads might be better if you trade lower timeframes, but, you might be trading off in poor execution.

When I first started trading, I really worried about spread cost. As I've matured, though, I've learned to match the criteria I need from my broker with my trading style. Spread cost is only one of several important factors to me. But, I'd rather pay a bit more in spreads and have excellent execution than have narrow spreads and poor execution.
  • #7
  • Nov 24, 2006 12:21pm Nov 24, 2006 12:21pm
Quoting stockwet
Neither, either, and both.

They both have their advantages and disadvantages. But, it depends on the type of trading system you use. If you trade long term, then, variable might be a great option since you can get good narrow trades and have flexibility on when to enter a trade. Fixed spreads might be better if you trade lower timeframes, but, you might be trading off in poor execution.
Can you explain why this is so? Are fixed spreads typically higher than variable spreads?
  • #8
  • Nov 29, 2006 10:01am Nov 29, 2006 10:01am
Nothin is fixed nowadays...
  • #9
  • Dec 5, 2006 6:07pm Dec 5, 2006 6:07pm
I was taught if you trade news releases you need a fixed spread. I use Oanda, it's variable but typically the spread is 1.5 on the EUR/USD.
How you act is more important than how you feel.
  • #10
  • Dec 5, 2006 6:50pm Dec 5, 2006 6:50pm
Quoting stockwet
Neither, either, and both.

They both have their advantages and disadvantages. But, it depends on the type of trading system you use. If you trade long term, then, variable might be a great option since you can get good narrow trades and have flexibility on when to enter a trade. Fixed spreads might be better if you trade lower timeframes, but, you might be trading off in poor execution.

When I first started trading, I really worried about spread cost. As I've matured, though, I've learned to match the criteria I need from my broker with my trading style. Spread cost is only one of several important factors to me. But, I'd rather pay a bit more in spreads and have excellent execution than have narrow spreads and poor execution.
good point, i use fxsol for my news trading and do about 1+mio and while other brokers or charging between 8-12 pips during news im only paying 5 pips on gbp/usd and execution is second to none. it just amaze me how a broker can charge fix spread during news, but im loving it.
If I Go Broke Trying Then I Will die happy.
  • #11
  • Dec 5, 2006 7:38pm Dec 5, 2006 7:38pm
Quoting Moe
good point, i use fxsol for my news trading and do about 1+mio and while other brokers or charging between 8-12 pips during news im only paying 5 pips on gbp/usd and execution is second to none. it just amaze me how a broker can charge fix spread during news, but im loving it.

Could it be that FXSol has access to better liquidity than some of the other brokers?

Keep in mind though that although execution at FXSol is very good, it comes with slippage during news time. So a fixed spread of 5 pips with say 10 pips slippage is the same as a 15 pips spread with other brokers. Different brokers just use different ways of widening the spread during news.
  • #12
  • Dec 6, 2006 12:42am Dec 6, 2006 12:42am
Quoting PipStar
Could it be that FXSol has access to better liquidity than some of the other brokers?

Keep in mind though that although execution at FXSol is very good, it comes with slippage during news time. So a fixed spread of 5 pips with say 10 pips slippage is the same as a 15 pips spread with other brokers. Different brokers just use different ways of widening the spread during news.
slippage, lmao, didn't you know that part of forex, i was talking to a trader who traded on currenex about three years ago and i was bitching about slippage and he bust out laughing saying he get slippage all the time sometime good sometime bad, with retail broker they just don't give you the good, i never realy get slip that much with fxsol maybe a pip or 2 depends on how you enter the market during news so i very happy with fxsol, i got more slippage from mb trading good and bad, just part of the game bro, don't let these retail broker brainwash you with this no slippage shit.
If I Go Broke Trying Then I Will die happy.
  • #13
  • Dec 6, 2006 2:54am Dec 6, 2006 2:54am
They use fxall.
If I Go Broke Trying Then I Will die happy.
  • #14
  • Dec 6, 2006 3:05am Dec 6, 2006 3:05am
Quoting Moe
slippage, lmao, didn't you know that part of forex, i was talking to a trader who traded on currenex about three years ago and i was bitching about slippage and he bust out laughing saying he get slippage all the time sometime good sometime bad, with retail broker they just don't give you the good, i never realy get slip that much with fxsol maybe a pip or 2 depends on how you enter the market during news so i very happy with fxsol, i got more slippage from mb trading good and bad, just part of the game bro, don't let these retail broker brainwash you with this no slippage shit.

I think that you missed the point, my friend.
I also trade with FXSol. I was saying that although FXSol has tight spread, you will get slippage at news time and may end up upon execution of an entry order with the same price as with a broker who widens the spread but doesnt have slippage. But you will gain with FXSol when you close the trade since they dont widen spreads.

You will not see much slippage if you enter a trade before or after the news which I think explains why you rarely get slipped or not by much. But you will get slipped on an entry order at news time. I've been slipped 10-12 pips at times, other traders have reported 20 pips slippage at NFP. And yes, it's part ot trading the forex at news time.
  • #15
  • Last Post: Dec 6, 2006 3:12am Dec 6, 2006 3:12am
Quoting PipStar
I think that you missed the point, my friend.
I also trade with FXSol. I was saying that although FXSol has tight spread, you will get slippage at news time and may end up upon execution of an entry order with the same price as with a broker who widens the spread but doesnt have slippage. But you will gain with FXSol when you close the trade since they dont widen spreads.

You will not see much slippage if you enter a trade before or after the news which I think explains why you rarely get slipped or not by much. But you will get slipped on an entry order at news time. I've been slipped 10-12 pips at times, other traders have reported 20 pips slippage at NFP. And yes, it's part ot trading the forex at news time.
i see what your saying.
If I Go Broke Trying Then I Will die happy.
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