Forex spreads

Discussion in 'Forex' started by run_forex_run, Mar 10, 2009.

  1. Hi,

    I am a newbie to FX trading. I have a couple of queries and really appreciate some help/suggestions.

    1. Do you pay for the spread both getting in and out of a trade? If the spread is 5 pips, we have to pay 10 pips just to cover our ass?

    2. My account provider also charges a 'commission' on top of this both way spreads. Is this common?

    3. Could you kindly suggest me a good broker with tighter spreads who is not a bucket shop?

    Thanks again for you help guys.
  2. You buy at the ask and sell at the bid. So if you entered a buy and then immediately sold, you would loose the spread, not twice the spread.

    Most forex dealers do not charge a commission but some do. From my experience, those charging a commission have tighter spreads so you might find it works better for you.

    I use IB for forex but it might not be the best for someone new to forex trading. See what recommendations others give you.
  3. Hurricane, how much do you need to trade Forex on IB? How much leverage do they offer? Thanks.
  4. ATLien


    You need 10,000 USD to open an account. 50:1 leverage.
  5. cstfx


    40:1 on majors, 40:1 twice on crosses, some pairs as low as 20:1.

    It's on their webpage.
  6. When I am buying, I am paying ask. If I put a stoploss at 45, it is taken out once the price hits 40. But if the profit target is 75, it stays on until price crosses 80. It looks like I lose 5 pips no matter what (on top of the 5 pips spread I pay when I get in). I am not complaining but wondering if its the standard norm.

    Could somebody please suggest a good broker for forex newbie?
  7. 1358june


    MB Trading is great to start out with for as little as $400.

    Even if you just use them for your trades and use other software to make trading decisions you'll do much better than using a market maker broker:
  8. Oanda and Metatrader (MT4) have free demo accounts and there are countless others.