5 Best Lowest Spread Forex Brokers for 2024

How to choose the best low-spread broker?

Here are some key points to take into consideration when choosing the lowest-spread broker to trade with.

Why is it important to choose a regulated broker?

Selecting a regulated broker is crucial as they are the ones that not only hold your funds but also execute your trades. If the broker is not properly overseen by a financial regulator, your funds could be at risk, and your trades may be executed without any best practices.

Choosing a broker that is overseen by a governmental financial body provides a higher level of safety and security. However, not all financial regulators are equal. In our evaluations, we classify financial regulators into three categories:

• Tier-1 regulators are from more established financial jurisdictions and include the UK Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC).
• Tier-2 regulators are lesser-known financial jurisdictions but are still deemed to be of a high standard, such as the Dubai Financial Services Authority (DFSA) and the Financial Markets Authority of New Zealand (FMA).
• Tier-3 regulators are typically from offshore-based nations, like the Vanuatu Financial Services Commission (VFSC) and the Securities Commission of the Bahamas (SCB).

Many brokers may have entities within their global organization that are governed by tier 1, tier 2, and tier 3 regulators, but they may also have entities that are not regulated at all, such as entities registered in St. Vincent and the Grenadines.

Having traded with many different brokers myself, I would say it is wise to verify which entity you are opening a trading account with and where and how they are regulated for peace of mind. However, the protections available to you from regulators also vary depending on the jurisdiction.

For example, traders who open an account with an FCA-regulated broker also qualify for the Financial Services Compensation Scheme (FSCS), which covers up to 85,000 GBP in case of broker insolvency. The Cyprus Securities and Exchange Commission (CySEC) makes sure brokers are part of the Investor Compensation Fund, which covers up to 20,000 EUR in case of insolvency.

On top of this, several tier 1 regulators will also enforce a negative balance protection policy on a broker’s retail trading clients while also enforcing that client funds should be segregated from company funds. However, many tier 2 and tier 3 brokers may also offer this service even though it may not be mandatory for them to do so, which I believe is a plus point.

I would not recommend trading with an unregulated broker, as there is no protection available if they decide to run away with your funds. Here you can find our guide on the best regulated forex brokers.

What fees should you be aware of when choosing a broker?

When choosing a broker, it is important to be aware of the different types of fees. These can be divided into two categories: trading fees and non-trading fees.

Trading fees are those that are charged when opening, closing, or holding a trade. Some common trading fees include spreads, commissions, and swaps. The spread is the difference between the buy and sell price and should ideally be as low as possible. Commission fees should also be low, while swap fees are charged for holding leveraged positions overnight (this is because you effectively borrow funds from the broker to control a larger position).

Brokers may offer accounts with zero spread but charge a commission or accounts with a higher spread and no commission. In our reviews, we consider the benchmark spread for EUR/USD to be 1.0 pips on a commission-free trading account. Anything below is good, anything above is high. Check out our guide on the best forex brokers with zero spreads.

For cross-currency pairs such as GBP/JPY, we consider a high spread to be above 5 pips and a low spread to be below 3 pips. Commission-based trading accounts also have a benchmark spread for EUR/USD averaging around 0.1 pips. Commission fees higher than $5 per 100,000 units of currency traded per transaction are considered high, as the industry benchmark is around $3.50.

There are also non-trading fees to take into consideration. These include fees for account management and deposits/withdrawals. Most retail brokers do not charge a fee just to have an account open, but they may charge an inactivity fee if there hasn’t been any activity on your account for a while. It’s also important to check the fees for deposits and withdrawals, as some brokers may charge for one or both options.

What is the best type of account for the lowest spreads?

Brokers can offer a variety of different account types for trading in the financial markets. Usually, the differences are based on the execution model or the minimum deposit.

The different types of execution accounts typically include:

• STP (Straight Through Processing). This is where orders are sent directly to the broker’s liquidity provider. Here you can find our guide on the best STP forex brokers.
• ECN (Electronic Communications Network). This is where orders are matched with prices from multiple liquidity sources such as investment banks.
• DMA (Direct Market Access). This is where clients trade directly with interbank market participants.

The ECN account types tend to offer the best spreads but are also usually commission-based, so be sure to check what those are. You can check the execution type of your broker and account by referring to its legal documents and terms and conditions, as regulated brokers must be transparent regarding this information.

Read more about Best STP forex brokers and Best ECN forex brokers.

Brokers may also offer account types based on the minimum deposit. For example, a Standard Account may have a minimum deposit of $100, and a Premium Account – a minimum deposit of $5,000. Brokers will typically offer lower spreads, commissions, and more trading tools to those with higher account balances.

Researching all the account types a broker has to offer is important to make an informed decision. You can test different account types by opening a demo trading account so you can trade in a virtual environment and practice risk-free.

Which trading platform is best to use?

Most trading brokers will offer the use of the popular MetaTrader 4, MetaTrader 5, and cTrader trading platforms, which can be accessed through desktop, web or mobile devices. While the desktop platform offers the most features, including automated trading capabilities, it’s important to also consider the broker’s proprietary trading platform.

The broker’s own platform may offer additional features, such as real-time news and trading ideas. It is important to consider your trading needs and choose the appropriate platform. There is a lot of helpful information online regarding MT4, MT5, and cTrader, which are not as user-friendly as a broker’s own platform.

Other platforms that are also used include TradingView, ProRealTime, and CQG. TradingView is a good option to have as it is web-based and user-friendly. I would suggest using a demo account or trial period to see what works for you.

From my own personal experience, it is wise to choose a broker that provides access to multiple trading platforms, so if one platform experiences any issues, you can use another one without any downtime.

Check our guides on the best MT4 brokers, best MT5 brokers, and best cTrader brokers.

Our Methodology

FXEmpire has been a pioneer in broker reviews. Our methodology for evaluating brokers has evolved over time, growing in depth and checkpoints to keep up with industry changes.

Our rating system is based on nine core categories: trust, fees, platforms and tools, tradable instruments, customer service, deposit and withdrawals, account types, research, and education.

Each of these categories includes more than 250 data checkpoints that are measured side-by-side with other brokers to determine how competitive a broker’s offering is in relation to the industry average.

These detailed evaluations give our readers a higher level of confidence in selecting the right broker for them.

To select the best lowest spread brokers, I have used the findings from our research team and have also further refined the brokers according to the following factors:

• Lowest spreads possible compared to the industry average
• Spreads without high mark-ups with access to raw spread pricing
• Low fees and commissions per lot (100,000 units of currency traded)
• The broker’s minimum deposit, and whether it is high or low
• The overall quality of the broker, its regulation, and reputation
• The trading platforms offered and additional trading tools available
• The variety of tradable instruments

By researching and analyzing these factors, I have presented you with the best options for low-spread brokers to consider and research further. A good way to get started is to test the features of a broker using a demo trading account first.

Meet Our Writers

The team of forex and CFD writers and editors at FXEmpire is composed of trading industry professionals and seasoned financial journalists. Our writers have been published on leading financial websites such as Investopedia and Forbes. In addition, they all have extensive trading experience.

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