avoiding paying the spread

I have a question, if I was going long, can I buy at the bid and close the trade off at the bid so to avoid the spread (Or use the ask price to buy and use the ask to close) ?

And vice versa when selling or going short to avoid paying the spread.

This I think is only possible with a certain type of broker but lets not get into that one.

Ahha. Good idea. Let's ask the broker if it can be done. Meet me halfway.

lol I don't get your tone. Not sure if you are saying yes, saying no or just not bright

I put the question up because I read this:

you pay a commission rather than having a "FIXED SPREAD".

It's "apples and oranges" so don't try to compare. "THE MATRIX HAS YOU" and you need to "FREE YOUR MIND" to understand what I am about to explain.

Let's say the current bid/ask is 1.5010 x 1.5015

The current spread is 5 pips.

You want to SHORT.

You SHORT at 1.5010.

You set a TP at 1.5005.

Bid/Ask becomes 1.5005 x 1.5009 and the current spread is 4 pips.

At ECN, you will get filled if the bid is 1.5005 and someone TAKES your offer.

Bid/Ask is now 1.5004 x 1.5009 and YOU HAVE YOUR PROFIT.

Note: the ASK never reached 1.5005. THIS IS IMPORTANT!

If you entered this order at a FIXED SPREAD BANDIT, whoops I mean broker, your order is STILL OPEN!!

The bid/ask must become 1.5000 x 1.5005 and your order HITS the Ask.

DO YOU GET IT?

If not, then read this over and over and over again until the LIGHT BULB goes off!!

The day I found out about *** is the day I opened an account there and stopped trading with FIXED SPREAD BROKERS.

When you place your TP Bid offer at 1.5005, your bid is displayed on Level II.

The point is with *** your offer gets hit.

With FIXED SPREAD BROKERS you have to wait to hit their offer.

Maybe this might help:

First:

1.5010 x 1.5015

and price drops...

1.5009 x 1.5014

1.5008 x 1.5013

1.5007 x 1.5013

1.5006 x 1.5012

1.5006 x 1.5011

1.5005 x 1.5011 You may get hit

1.5005 x 1.5010 You may get hit

1.5004 x 1.5009 YOU COVERED 5 PIP GROSS PROFIT

AND LET'S CONTINUE

1.5003 x 1.5008

1.5002 x 1.5007

1.5001 x 1.5006

1.5000 x 1.5005 YOUR FIXED SPREAD BROKER FILLS YOUR ORDER

Yikes, I'm not bright I guess. I'm gonna have to delve into those numbers.

opps hit a nerve, gonna get banned soon

Hit a what? Who?

Ahha, got YA!

Okies, gimme some time, I need to free my mind. Concentrate. Yeah.

No light bulb for me, at least not yet. My br0ker (Go Markets) is an ECN, their spreads are always fluctuating. But if I sell at 1.5010/1.5015, then my sell price is the bid (1.5010), and I have to wait for the ask price to hit my TP before they'll close my position. The difference between the bid and ask price is still some kind of handicap, whether one sees it as a spread or not.

What am I missing?

Sure, if your platform is in netting mode (vs hedging mode), and if you trade through an ecn so that you can place an offer yourself (act as liquidity provider), and of course get filled by someone.

Does anyone know of a broker that has tight fixed spreads at all times, and which don't massively gap at news times?

Nowadays spreads are pretty tight on some fx brokers, so you don't really need to dig so deep. More, if you think in terms of TA, setups and price action, you are actually not "paying" anything, (the spread is in the cost-of-trade sum = distance to your stop out level). In some platforms however there is option "join" the bid or join the ask. That was very important feature back in the days on the futures, commodity etc. markets, and is not typical for fx.
Of course there are brokers out there that can give you what you look for. Even better.
In my platform i can bid the highest price and offer the lowest, so i can actually play a MarketMaker role. And then you are "paying" the spread to me.
Works on most of the crosses.

Okay, I'll bite: So you are talking about a broker that charges a commission rather than a spread? I think it would be good but it depends on the size of the commission. Do you have one in mind?

Short answer. No.

You always have to pay the spread.... and then beat the spread to go into profit. Even if it is fixed and small. If a broker has a commisions you have to pay that doens't mean there is no spread. Just because they may be an ECN doens't mean they can offer trading with no spread.

So, with commission brokers you have to pay the commission and beat the spread.

If a broker tells you they dont have a spread, run, it's a scam.

If you are worried about the spread trade pairs with low spreads. With my broker EU is regulary 2 pips. Though I prefer GU which is regularly 4 pips.

ECN brokers still have a spread even though they charge commission. The big difference is that their spread isn't fixed like the no-commission fixed spread brokers.

The spread on an ECN broker is a real spread based on real bids and asks in the market. It's potentially very narrow.

Kumo and Steve are giving you the right answer. You always have the spread, and that broker you were looking at was just playing a shell game, making you concentrate on something irrelevant. With true ECN you sometimes have zero spread and you occasionally have a crossed-market, where the Bid is higher than the Ask, but those are rare.

Rob

When you're trading through a retail broker, there is no way to avoid the spread. In fact, you can compare the spread to the 0 in roulette, and it is one of the most important reasons why people wipe their account (which can be speed up by excessive risk taking.)

In real markets, the spread is determined by the highest bid and the lowest offer. In these markets, liquidity providers "take" this spread, and liquidity takers pay it. Trading directly in such markets is generally done on a commission-basis, but this can reach extremely low levels for institutional market makers.

Well my new broker seems to have two orders for sell/buy stops, one at the bid and one at the ask, also the stop loss order can also be at bid or ask.

Not sure why they have this which is why I asking the original question to anyone knowledgeable.

I'm testing now plus I'm going to send an email to my broker when I get some time.

Thanks for the replies and discussion guys.

You'd basically need to find an ECN where you can make the bids/offers, rather than just hitting them. Definitely can be done, though you'd be trying to compete manually with programs that do the same thing: probably not gonna work well. No way this can be done with a retail dealer. Bear in mind price/time priority, you're probably usually going to get filled last so you may struggle to capture the spread. Also with a massive 5 pip spread I imagine the commissions on the pair will be high (and you'll probably find the spread on an ECN is generally lower than 5 pips).

Futures would be an alternative.