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Spread – The spread is the difference between the bid and ask prices of currency pairs. Whenever you go long on a currency pair, you’ll get the ask price. Similarly, if you decide to close your long position or want to go short on a currency pair, you’ll get the bid price. This difference between the bid and ask price is your broker’s profit. While some dealing desk brokers offer fixed spreads, most of the time spreads are variable and depend on the current market conditions. If there are important and unexpected news in the market, spreads can widen significantly and increase your trading costs. During normal market conditions, spreads tend to be quite low with most brokers, reaching around 1 pip for most major pairs. For day traders, the New York / London session overlap usually has the lowest spreads during the day. Commissions/Fees – Besides the spread, some brokers may also charge you a fixed commission or fee per trade. This is especially true with ECN brokers. However, commissions and fees tend to be quite low due to the high competition among Forex brokers. For example, a broker may charge you a $1 commission for a pre-specified lot size, such as 1 lot or 10 lots. Trading Platforms – The next major income for Forex brokers are trading platforms. While many brokers offer free in-house developed and third-party trading platforms, some of them may also charge you for additional features. If you’re a professional trader, you may look at the offer of Forex trading platforms provided by your broker and look for features that could help you in your daily trading. The main point to consider is that the offered feature increases your profitability and efficiency more than the cost of the service. Beginner traders, on the other hand, are likely fine with the range of features offered with free trading platforms. Additional Services – Finally, some brokers may offer additional paid services. For a small cost, you may get access to a larger range of tradable instruments, professional market research, trading signals and market depth information, to name a few. Nthat they could not only elevate Castruccio, but even advance him to the I
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