Hello, it's been a while since I wanted to stress on the importance of tighter spreads and now I have two trades that I will use as an example. Before I continue, I would like to say that this post is targeted at rookie traders, who still haven't selected a broker. Yesterday I found out that I have a cent account, which I haven't used for a while, with a small amount of money left in it, so I decided to give it a try and see where it goes. The spread on the EUR/USD is fixed on 3 pips on the account. So the first trade which took place yesterday had a 10 pip target, I am a price action trader so I saw a bearish action when the trade was at 8-9 pips profit so I close the position for a profit of 9 pips. Here the sacrificed amount because of the spread is 1 pip, but still that's 10% more profit if the spread was 2 pips or less and 1% gain on capital instead of 0.9% if for 10 pips you make 1% as I do. With the second trade, which took place today, the situation was much more unpleasant. The trade was running fine, again on the EUR/USD, again a 10 pip target, price was heading towards the target quite fast, being at 9 pip profit after 15 minutes. Towards the target a bearish formation again, this time the pair pulled back significantly so I had to close the position for 2 pips profit. All in all having a 3 pip spread instead of 2 or less costed me in total 9 pips out of 20 total potential profit or 45% less money made. Hope this would help someone when looking for a broker, to choose a one which has the most attractive conditions and of course look for strict regulation as well!
Cheers, all the best in your trading time!
Cheers, all the best in your trading time!