7 Best Low Spread Forex Brokers in 2024
Updated February 4, 2024
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Best Low Spread Forex Brokers in the UK
Forex trading presents a host of opportunities for investors seeking to tap into the global currency market.
However, using the wrong brokerage can impact your trading experience and overall profitability.
In this article, you’ll discover the best low spread forex brokers in the UK and the essential factors to consider when selecting the best brokerage for your trading needs.
From understanding the concept of low spreads to exploring the pros and cons of this approach, as well as offering valuable tips for choosing the optimal broker, this article serves as a comprehensive resource to help you navigate forex trading and make informed decisions that align with your investment goals.
A List of Low Spread Brokers in the UK
Here is a list of low spread brokers in the UK.
1. eToro
Pros
- Lots of tradable products available
- Known for low commission
Cons
- Customer support could be better
- Withdrawal fees
Minimum deposit: $10
Spreads: Starting from one pip
Costs: $10 per month inactivity fee and $5 withdrawal fee
Account opening: Fast, only takes one day and no minimum deposit
eToro is a prominent social trading platform that has gained popularity among traders for its unique approach to online investing.
The platform allows users to access a diverse range of financial instruments, including stocks, cryptocurrencies, commodities and forex.
One of the key features that sets eToro apart is its social trading functionality, which enables users to follow and even automatically copy the trades of successful and experienced investors on the platform.
The platform offers spreads, starting from one pip on major currency pairs, allowing traders to execute trades with relatively low costs. While the spread is higher compared to other brokers, there is no commission, making eToro a very cost-effective low spread no commission forex broker.
Apart from forex trading, eToro provides a variety of other investment options, making it a comprehensive platform for traders interested in diversifying their portfolios.
The platform is available on both web and mobile devices, allowing traders to access their accounts and manage their investments on the go. Both platforms have good safety features and usability.
76% of retail investor accounts lose money when trading CFDs with eToro. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take two mins to learn more.
2. Pepperstone
Pros
- Uses MetaTrader and cTrader – great for algorithmic traders and copy traders
- One of the industry's best for research tools
- Competitive pricing
Cons
- High overnight costs
- Lacking in educational materials
- Lacking some safety features like two-factor authentication
Minimum deposit: £0
Spreads: Starting from 0.1 pips
Costs: No inactivity fee and no withdrawal fee
Account opening: Fast, only takes one day and no minimum deposit
Pepperstone is a well-established Australian-based forex and CFD broker that has gained a strong reputation in the industry for its competitive pricing and advanced trading infrastructure.
It charges $3.50 commission per lot per trade, putting it in line with others when completing a lowest spread forex broker comparison.
The platform is available on desktop, web and mobile devices. Reviews state that all platforms are user-friendly with good features and customisation.
3. AvaTrade
Pros
- Highly regulated
- Free deposit and withdrawal
- No commission
- Low minimum deposit
- Social and copy trading
Cons
- Not available for US clients
- Inactivity fees
AvaTrade is a well-known online broker specializing in Forex trading, among other financial instruments. It has garnered attention for offering low spreads, which is a critical aspect for many Forex traders.
AvaTrade is a regulated broker with multiple international licenses. This regulatory oversight provides a level of safety and credibility, ensuring that the broker operates under strict guidelines and standards.
One of AvaTrade's key attractions is its competitive spreads. Low spreads are beneficial for traders as they reduce the cost of trading. Especially in Forex trading, where profit margins can be slim, low spreads can significantly impact a trader's profitability.
AvaTrade offers a variety of trading platforms, including MetaTrader 4 and MetaTrader 5, which are popular for their user-friendly interfaces and advanced trading tools. They also offer their proprietary platform and mobile apps, catering to the needs of different traders.
AvaTrade is known for its extensive educational resources, which are beneficial for both novice and experienced traders. These resources include webinars, video tutorials, and articles that cover various aspects of trading.
Good customer support is crucial in trading, and AvaTrade is reputed for providing responsive and helpful support. This support is vital, especially for new traders who may need assistance navigating the platform or understanding trading concepts.
It's important to note that while AvaTrade is renowned for its low spreads and robust platform, trading in Forex and CFDs involves significant risk. Traders should be aware of these risks and consider their experience level and financial situation before trading. Additionally, it's always a good idea to start with a demo account to familiarize yourself with the platform and trading strategies without risking real money.
4. IG
Pros
- Tier-1 regulation
- Excellent educational resources
Cons
- Slow customer service
- Limited products
Minimum deposit: £0
Spreads: Starting from 0.6 pips
Costs: £12 per month inactivity fee, no withdrawal fee
Account opening: Fully digital, one to three days (but most likely three days)
With a strong focus on providing a user-friendly trading experience, IG has earned itself a place on the list of low spread brokers.
Its intuitive and feature-rich trading platforms, including the proprietary IG platform and MetaTrader 4 (MT4), cater to the needs of traders at all levels, offering a seamless and efficient trading environment.
IG provides competitive spreads, starting from 0.6 pips on major currency pairs, enabling traders to execute trades with minimal costs and maximise their potential profits. It's important for traders to consider additional costs such as overnight fees, inactivity fees and other charges associated with their trading activities.
In addition to forex trading, IG also offers access to a wide range of other financial instruments, including stocks, commodities, indices and cryptocurrencies, allowing traders to diversify their investment portfolios.
The platform is accessible on web, desktop and mobile devices, enabling traders to stay informed and manage their trades efficiently on the go.
5. Tickmill
Pros
- Full MetaTrader suite available, as well as platform add-ons
- 1st overall for commissions and fees
Cons
- Limited product portfolio
- Outdated platform design
Minimum deposit: $100
Spreads: Starting from 0.2 pips
Costs: No inactivity fee and no withdrawal fee
Account opening: Fast, only takes one day and no minimum deposit
Tickmill is a global financial services provider offering a wide range of trading products, including forex, CFDs and commodities.
The company is known for its commitment to providing traders with access to competitive pricing, advanced trading platforms and a transparent trading environment.
The broker offers competitive spreads, starting from 0.2 pips on major currency pairs, allowing traders to execute trades with minimal costs and enhance their trading strategies.
While there is a $2 commission per lot per trade, Tickmill is one of the most cost-effective low spread no commission forex broker options.
The platform is available on web, desktop and mobile devices but has poor design features and lacks the safer login options.
What Are Low Spread Forex Brokers?
The best low spread forex brokers are firms that provide traders with access to a platform that allows them to buy and sell foreign currencies.
These brokers may offer various services such as trading platforms, analysis tools and educational resources to help traders make informed decisions in the foreign exchange market.
In forex trading, the spread refers to the difference between the buying price (ask) and the selling price (bid) of a currency pair.
It represents the cost of trading and is typically measured in pips, which is the smallest price move that a given exchange rate can make. The spread is calculated by subtracting the bid price from the ask price.
A low spread in forex trading generally refers to a small difference between the bid and ask prices.
A low spread is advantageous for traders as it implies lower transaction costs and allows for more efficient trading.
A specific spread can be considered low or high depending on the currency pair being traded, market conditions and the standard spreads offered by different brokers.
In general, a low spread is often considered to be around one to two pips for major currency pairs, although this can vary depending on market conditions and the specific broker's offerings.
Traders often look for the lowest spread and commission forex broker to minimise their trading costs and maximise potential profits.
How to Choose the Best Low Spread Forex Brokers
Choosing the best forex broker with low spread and no commission requires careful consideration to ensure a secure and efficient trading experience.
Here are some essential tips to help you select the most suitable broker:
Step 1. Research the Platforms
Conduct thorough research on different low spread forex brokers to verify their legitimacy and reputation.
Look for well-established brokers with a track record of reliable service and positive customer reviews.
Avoid potential scams by checking the broker's regulatory compliance and licences from reputable financial authorities.
Step 2. Prioritise Security
Ensure that the broker's security features are robust and up-to-date to protect your personal and financial information.
Look for the best low spread brokers that implement advanced encryption technologies, secure payment methods and stringent data protection measures to safeguard your funds and sensitive data from cyber threats.
Step 3. Check Charges
While focusing on low spreads is important, it's crucial to consider other charges such as commissions, withdrawal fees, inactivity fees and any hidden costs associated with trading.
When conducting a lowest spread forex broker comparison, ensure you evaluate the overall trading costs to get a comprehensive understanding of the expenses involved in trading with a specific broker.
Step 4. Consider User Recommendations
Pay attention to user reviews and recommendations from other traders to gain insights into the broker's overall performance, customer support quality and trading platform functionality.
While considering user feedback, keep in mind that individual experiences can vary, so aim to gather a comprehensive understanding of the general consensus regarding the broker's services.
Step 5. Match Your Investment Profile
Choose a low spread forex broker that aligns with your investment knowledge, risk appetite and trading preferences.
Consider whether the broker offers suitable educational resources and trading tools for your level of experience.
Additionally, assess the broker's account types and minimum deposit requirements to ensure they match your investment capabilities and objectives.
By following these tips, you can effectively evaluate and select the best low spread forex broker that meets your specific trading requirements and provides a secure and transparent trading environment.
Should You Go With a Low Spread Forex Broker?
Opting for a forex broker with low spread and no commission can offer several advantages, but it's crucial to assess these benefits in the context of your investment goals and risk appetite.
Some of the pros of low spread trading include:
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Cost efficiency – Low spreads can lead to reduced transaction costs, allowing traders to retain more of their profits. This can be particularly beneficial for frequent traders or those executing large volumes of trades.
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Easier entry and exit points – With tighter spreads, traders can enter and exit positions more conveniently, as the smaller difference between bid and ask prices can make it easier to capture small price movements. This can be advantageous for traders employing short-term or scalping strategies.
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Enhanced trading strategies – Low spreads can support various trading strategies, especially those that rely on precise timing and small price differentials. This can enable traders to implement more sophisticated strategies with improved precision and accuracy.
However, there are also some potential drawbacks to consider when trading with a low spread forex broker, including:
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Higher overall trading costs – While low spreads can minimise the direct transaction costs, some brokers may compensate for this by charging higher commissions or fees, leading to higher overall trading costs. Traders should carefully consider all costs associated with trading, including any hidden fees, to accurately assess the overall expense of trading with a particular broker.
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Limited availability – Low spread brokers may not always be accessible to all traders, especially those operating in certain regions or with specific trading preferences. This limited availability might restrict traders from accessing certain markets or trading instruments, which could potentially limit their trading opportunities.
Frequently Asked Questions
There are several brokers that offer low spreads. However, they may charge more for commission, additional fees and minimum deposits. The best forex broker with the lowest spread is the one that suits your trading goals and budget.
The broker with the smallest spread is typically subject to market conditions and can vary. However, among reputable options, Pepperstone, CMC Markets, IG, Capital.com, Tickmill and eToro are known for providing some of the smallest spreads.
A low spread is generally favourable as it signifies reduced transaction costs, facilitating more cost-effective trades and potentially higher profits. It allows for more favourable entry and exit points and supports various trading strategies. However, traders should consider additional costs and the overall trading environment when evaluating low spread benefits.
Among renowned brokers, those known for offering tight spreads include Pepperstone, CMC Markets, IG, Capital.com, Tickmill and eToro. They provide competitive spreads, often starting from 0.1 pips, allowing traders to execute trades with minimal costs and enhance trading strategies. Traders can benefit from cost-efficient trading and a transparent pricing structure.
Forex spreads can be high due to various factors, including market volatility, low liquidity and increased demand. Additionally, brokers may charge higher spreads to cover operational costs or compensate for additional services. Understanding market conditions, pricing policies and specific currency pairs being traded can help manage and anticipate high spreads.
An acceptable spread in forex depends on the currency pair being traded and market conditions. Generally, a low spread is preferred, with major currency pairs typically having spreads around one to two pips. However, what is acceptable varies depending on traders’ strategies and risk tolerances, broker offerings and market conditions.
The 531 rule is a risk management guideline. It suggests allocating 5% of the trading account balance to each trade, limiting total exposure to three trades at a time and setting a maximum loss of 1% per trade. It aims to control risk, manage capital efficiently and minimise potential losses.
Final Thoughts
Ultimately, the decision to choose a low spread forex broker should align with your individual trading style, risk tolerance and financial goals.
While low spreads can be advantageous for certain trading strategies, it's essential to consider other factors such as the broker's overall trading costs, available trading instruments, regulatory compliance and customer support to make an informed decision that best suits your trading needs.
Conduct thorough research and consider consulting with a financial advisor to determine the most suitable broker and trading strategy based on your specific circumstances.
WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.
