Spreads Or Commissions
Once you are done with selecting the broker with whom you will start your Forex Trading, the next thing is to decide which type of account you should have. The Forex Brokers offer two types of accounts Spread and Commission account. Here are few things which you should keep in mind while choosing the account type. the difference between the Bid and Ask price. Now this is a trick of the brokers to get you in by saying that there are no commissions for the trades but don’t get charmed by it as there is a mark up which the brokers keep in their prices to get their earnings which replica hermes loafers
could be even 1 pip to 3 pips also. I have experienced the same by opening a spread and a commission account with the same broker. They might be promoting 0.0 pip spreads in their ads but for the Spread account every broker has a certain mark up. In this scenario your profits might be delayed a bit. If you have a small account or Trade smaller lots then this type of account is recommended for you. Especially if you are a day trader or a scalper trading smaller lots and the pip value is lesser.
Commission Account: In this type of account you pay a certain commission to the broker for the trades you open. USD 7 round turn commission on a USD 100,000 position. It can also be taken as USD 0.0007 per 1 USD you trade. 1 standard lot or more per position. In this case your pip value is higher approx. 10 USD per pip. If you are a Scalper or Day trader you can easily override your commission with a 1 pip move (In case of my broker). In this type of account you actually have tight spreads as every Forex Broker tells you. They can even give you a 0 spread in this account as per the market situation because you are already paying them commission so they need not add any mark up to earn from you.
Summarizing the whole thing if you are a small trader or trade small volumes Spread account is good for you. If you Trade big volumes it is better to have a Commission account. This is not a thumb rule but a recommendation based on my own personal experience.
I always say before entering the market do a good research on everything which affects your profits in Forex Trading and actually everything from choosing a broker to entering your Trades does affect your profits in the Forex Trading market so, always be care careful before taking a step in this market.