Best Low Spread FOREX Brokers in 2024

Although brokers make their money from spreads, these fees can also affect a FOREX trader’s profitability. That’s why many FOREX traders, before settling on a broker, are chiefly concerned about finding a broker that offers the lowest spreads. 
No matter where you are in your trading career, due diligence is a crucial step you must conduct before trading, and also periodically as you go forward. Spreads can significantly affect your trading costs. Lower spreads ensure more of your money goes toward your trades rather than being lost in fees. Low spreads are what FOREX traders look for in a cost-effective FOREX trading experience. In what follows, we will share all the most important details regarding the top brokers known for their minimal spreads. We will also provide you with a curated list of the best lowest spread FOREX brokers.

What Are Spreads?

FOREX trading is all about exchanging one currency for another. To create a universal language in which everyone understands the value of a currency in relation to another, currency A is quoted in terms of its price in currency B. This is known as the exchange rate. The spread is the difference between the exchange rate that a broker sells a currency and at which the broker buys that currency. 

Let us explain further and show you spreads in action. When you invest in a currency at the prevailing exchange rate, otherwise known as the spot rate, and later sell it for a profit, the difference between what you bought it for and what you sold it for is your gain (or loss) on the spread.

Let’s look at a common example. The EUR/USD is one of the most traded currency pairs in the world, where EUR (Euro) is the base currency, and USD (U.S. Dollar) is the quote currency. When we look at the EUR/USD exchange rate, we're essentially seeing how much 1 euro is worth in U.S. dollars.

For instance, if the EUR/USD exchange rate is 1.1000, this means 1 Euro is equivalent to 1.10 U.S. dollars. When trading, you'll encounter two prices: the bid and the ask. The bid is the price at which you can sell the base currency (here, the Euro), and the ask is the price at which you can buy the base currency.

Suppose the bid price for EUR/USD is 1.0995, and the ask price is 1.1005. The spread, which is the cost of the trade, is the difference between these two prices. In our example, the spread would be 1.1005 (ask) - 1.0995 (bid) = 0.0010, or 10 pips (a pip is the smallest price move that a given exchange rate can make based on market convention). Read our article on pips here.

Now, let's say you believe the Euro will strengthen against the Dollar, so you buy €100,000 at the ask price of 1.1005 USD for each Euro. This means you're spending $110,050 for your Euros (100,000 Euros X 1.1005 USD/Euro).

Time passes, and your prediction comes true! The Euro strengthens against the Dollar, and the new EUR/USD rate is 1.1025 bid / 1.1035 ask. You decide to take your profit and sell your €100,000. Since you're selling, you'll do so at the bid price of 1.1025. So, you receive $110,250 (100,000 Euros X 1.1025 USD/Euro).

Your profit is the selling price minus the buying price: $110,250 (selling price) - $110,050 (buying price) = $200. Despite the Euro only moving 20 pips against the Dollar (from 1.1005 to 1.1025), you've made a profit! However, part of this movement was to cover the spread (the 10 pips difference between the bid and ask price when you initially bought the Euros), and the remaining move provided your profit. This illustrates how gains or losses in FOREX trading can come from both the currency's price movement and the initial spread cost. 

Why Spreads Are Important

It’s clear from the above example why choosing a broker with low spreads can help you maximize your profitability. In retail FOREX trading, securing the best spreads is like laying a strong foundation for a building: it's essential for ensuring long-term success and stability of your trading endeavors. 

Spreads directly impact the cost of trading. Lower spreads mean lower trading costs, allowing you to keep a larger portion of your gains. Especially for those who trade frequently or with large volumes, the cumulative effect of spreads can be huge. 

Furthermore, competitive spreads can offer a clearer picture of the market price, leading to more accurate trading decisions. In a market where profit margins can be thin, and every pip counts, finding a broker that offers the lowest possible spreads can make a significant difference in whether you make money or spend your time paying fees.

How Market Makers Determine the Spread

So, who really sets the spread? It’s not really the broker. They are a small part in a larger chain. The FOREX market is a virtual world where intermediaries known as market makers coordinate transactions. They are often highly-trained specialists, individuals, or small agencies, based in cities all over the world. 

In truth, it is the big players, like large financial institutions, that drive the most FOREX volumes, not retail traders, who are but a small part of the ecosystem. Market makers are skilled and experienced at ensuring an orderly flow of buy-and-sell orders for the currencies in which they work. They have many clients around the globe and they are skilled at brokering massive transactions.

There is implied risk in this process as prices can change quickly, so market makers must insert a premium that involves elements of their own profit plus a premium for risk. In coordination, market makers across the ecosystem help determine the spread equilibrium of global currencies. Then, retail brokers follow their lead. For you as a retail trader, it helps to understand that your broker procures its FOREX from a market in which prices are influenced by market makers, and this is how you are presented with the spreads you see on your FOREX quote.

Best Low-Spread FOREX Brokers 2024

How to Verify that a Broker Is Low Spread

There’s really no getting around, other than helpful comparison articles like the one you are reading now; nothing substitutes good, solid research when trying to find the best spread brokers. Here is some of the legwork you can do:

• Check broker websites: Start by visiting the websites of various brokers. Most brokers transparently list their average spreads for major currency pairs on their site, providing a direct comparison tool.

• Use demo accounts: Open demo accounts with several brokers. Demo trading allows you to observe the spreads in real-time under live market conditions without risking real money.

• Read reviews and forums: Look for user reviews and discussions in trading forums. These can offer insights into the actual spreads experienced by traders and any issues related to the widening of spreads under certain conditions.

• Analyze trading costs: Consider not just the spreads but also any additional fees that might apply, like commissions or swap rates, to get a comprehensive view of trading costs.

• Check for spread consistency: Pay attention to whether a broker offers fixed or variable spreads and how these spreads might fluctuate during major economic announcements or at different times of the day.

• Regulatory compliance: Ensure the brokers are well-regulated by reputable authorities. While not directly related to spreads, regulatory compliance is a good indicator of the broker's reliability and fairness in pricing.
  By meticulously evaluating these factors, you can better compare the spreads offered by different brokers, ensuring that you select one that aligns with your trading strategy and cost considerations.

How Much Money Do You Need to Get Started?

You don’t need much to get started. Some of the best FOREX brokers for beginners allow you to start trading with as little as $1. Of course, you need to capitalize your account with at least some money that will allow you to place trades. The amount is really up to you. However, it is recommended that you start by placing small trades to get to grips with the practice of trading as well as your broker’s Website before you move on to placing trades with more money.

How to Avoid Losing at the Low-Spreads Game

We get it, comparing spreads is a laborious process. However, it’s something you simply must do. We hate to be the bearer of bad news, but some brokers have been known to artificially inflate spreads during volatile market conditions, quoting spreads that are consistently wider than advertised, or implementing slippage that always seems to work against the trader. 

These practices not only erode traders' profits but can also significantly impact the trustworthiness and perceived integrity of the FOREX trading industry. It’s tough to say, but it’s true. Fortunately, a well-regulated broker is more likely not to engage in these activities as regulators exist to protect the interests of traders like you. However, to be extra certain, you can guard against these deceptive practices through these measures:

• Research and education: Have we mentioned this before? Educate yourself about normal spread ranges for different currency pairs and trading conditions. Knowing the average spreads for the major, minor, and exotic pairs in which you're interested can help you spot anomalies.

• Broker transparency: Look for brokers that are transparent about their spread policies and trading conditions. Brokers regulated by reputable financial authorities are often required to maintain a level of transparency and fairness in their operations.

• Regulatory protection: Trade with brokers regulated by credible financial authorities like tier-one regulators. These organizations ensure that brokers adhere to certain standards and practices, offering a layer of protection to traders.
  By staying informed and vigilant, you can better navigate the FOREX market and protect yourself against unfair spread practices, ensuring a more transparent and equitable trading environment.

What to Look for Among the Best Low-Spread Brokers

When embarking on the quest to find the best low-spread broker tailored to your trading needs, several important matters should guide your selection process:

Genuine low spreads: It might seem obvious, but it's crucial to thoroughly verify that the brokers in question genuinely offer low spreads. This doesn't just mean glancing at their advertised rates; delve deeper by examining real-time spread data during different market conditions.

Inclusive trading environment: Opt for brokers that not only accommodate traders from diverse geographical backgrounds but also cater to a wide range of trading experiences, from newbies to veterans. 

Powerful reputation: In the FOREX market, a broker's reputation is its currency. Focus your search on brokers that are renowned for their reliability and trustworthiness.

Cost efficiency: While low spreads are a priority, don't overlook the overall cost of trading. Assess brokers based on their complete fee structure, including any commissions and hidden charges, to ensure you're getting the best deal.

Advanced trading platforms: A superior trading experience hinges on the quality of the trading platform. Seek out brokers that offer advanced, intuitive platforms equipped with a suite of analytical tools to enhance your trading strategy and decision-making process.

Varied account options: Recognizing the diversity in trading strategies and experience levels, the best low-spreads and low-commission brokers should offer a range of account types to suit different trader needs, allowing for a more customized trading experience.

By keeping these factors in mind, you'll be well-equipped to sift through the multitude of brokers available and select one that not only promises but also delivers on the promise of low spreads, complemented by a robust trading environment.

Best Low-Spread FOREX Brokers 2024

How to Choose the Best Low Spread FOREX Brokers

Follow the next tips to choose the best low spread broker:

Commission and Fees

This area of consideration is crucial and requires your close attention. For a start, low-spread brokers must offer you a competitive fee package. Trading fees can sometimes be difficult to track. Be sure to check how these fees compare with industry standards:

Spreads: There are two main kinds of spread, one is fixed and the other is variable. As we have said, the spread refers to the difference or gap between two prices, such as the bid/ask rate in a currency exchange rate. An example of a good spread is 1.4 pips for the EUR/USD (the narrower the better, this means that a spread of 1.4 pips is better than a spread of 2 pips).

Commission: This is nothing more than the service charge that brokers require for carrying out transactions on behalf of their clients.

Rollover fees: When you leave a trade open overnight, the broker normally charges a rollover fee for the facility of holding your trade open for that period of time. This is because it assumes the risk of the market changing adversely.

Withdrawal and Deposit Fees: Some platforms might charge fees for depositing or withdrawing funds. Pay attention to this. It's important to be aware of these and any associated limits or conditions.

Subscription or Inactivity Fees: Certain platforms have monthly charges or fees for inactive accounts. Ensure you're aware of these potential costs.
Focusing on these aspects ensures that you engage with a broker not only offering low spreads but also maintaining a transparent and fair fee structure, crucial for optimizing your trading outcomes.

Using Leverage with Low-Spread Brokers

This is linked to the points we made about regulation. Different regulators have different guiding policies in leverage. Consider this, with brokers based in Europe operating under the rules of the European Securities and Markets Authority (ESMA), the leverage for FOREX trading is heavily regulated. Because of this, you can only get leverage of:

• 30:1 for major currency pairs   

• 20:1 for non-major currency pairs, gold, and major equity indices   

• 10:1 for commodities other than gold and non-major equity indices   

• 5:1 for individual equities and any underlying not otherwise mentioned  

• 2:1 for cryptocurrencies

So, how do spreads and leverage interact? We’ll tell you how:

High Leverage: 

High leverage can make even small spread differences more impactful. With high leverage, the relative cost of the spread becomes a smaller portion of the initial investment but a larger portion of the potential profit or loss. For example, if you use 100:1 leverage, a small adverse move in the exchange rate can quickly lead to significant losses, making the cost of the spread more critical in short-term trading strategies.

Low Leverage: 

With low leverage, the impact of spreads on overall profitability is more straightforward. The cost of the spread represents a more direct expense against potential profits since the position sizes are smaller and the risk of a rapid loss is reduced. Traders might be more willing to accept higher spreads for other benefits, such as better customer service or more sophisticated trading tools.

Interaction:

The interaction between leverage and spreads is a balance of risk management and cost efficiency. High leverage can make trades more sensitive to spread costs, especially in strategies that rely on small price movements. Therefore, competitive (low) spreads become more critical as they can significantly affect profitability. On the other hand, with low leverage, the absolute cost of spreads becomes more directly significant to the trade's outcome, making competitive spreads important for maintaining profitability, especially in strategies with fewer, larger trades.

Tradable Assets and Instruments

Spreads play a pivotal role in the trading of a diverse array of financial assets, influencing not just the immediate cost of trading but also the broader strategy and profitability of investments. This is particularly true for markets such as FOREX, commodities, cryptocurrencies, bonds, and stocks. Each of these asset classes is subject to the dynamics of bid and ask prices, and, hence, spreads. A lower spread means less cost to the trader for each transaction, which is especially crucial in fast-moving markets where traders capitalize on small price movements.

FOREX markets are attractive for their tight spreads, making them a focal point for traders seeking cost efficiency alongside high liquidity. Commodities and cryptocurrencies, while also benefiting from competitive spreads, can exhibit wider fluctuations due to market volatility. Bonds and stocks, on the other hand, might see varying spreads based on liquidity, market conditions, and the specific assets in question.

For traders looking to diversify across different financial assets, understanding how spreads affect each market is key. Brokers that offer low spreads across a broad spectrum of assets provide a more cost-effective trading environment. This is why it's a good idea to conduct a comparative analysis, possibly using a spreadsheet, to evaluate how different brokers stack up in terms of spreads across the assets of interest. 
The choice of broker can significantly impact your trading costs and strategy, highlighting the importance of spreads as a critical consideration in the selection process.

Payments, Deposits, and Withdrawals

Ideally, the payment deposit and withdrawal process among low-spread brokers should be straightforward and convenient. The best low-spread and low-commission brokers operate in a modern financial infrastructure where the banking system is advanced, making transactions, including withdrawals from brokerage accounts, relatively straightforward for all traders. The best brokerages offer multiple withdrawal methods, including bank wire transfers, credit/debit card transactions, and even online payment systems. The efficiency of these methods can vary, so be sure to read what your chosen broker says that it can do in this area.

The Importance of Customer Service

As timing is key to FOREX trading, you must pick a low-spread broker that is able to provide good customer support around the clock. This most notably includes the company representatives being easy to reach, fast, and polite, which will, in turn, spare you having to worry about problems down the road.

Ask Other Traders on Our Network

Here at Arincen, we’ve gone to extensive lengths to create an enabling environment of networks, where traders of all backgrounds can take part in a vibrant trading space. After all, Arincen’s goal is to simplify the world of trading. Our website provides an unrivaled selection of tools, like our market-leading signals, rolling news, and a thriving community where traders of all levels of experience can learn and profit from each other.

Trading Platforms, Tools, and Features

The best low-spread brokers distinguish themselves not only through their competitive spreads but also via the robustness of their platforms, tools, and features, which are designed to empower you to make informed decisions and execute trades efficiently. 

An advanced trading platform is important, offering a seamless and intuitive user experience with real-time access to market data, charts, and analysis. Such platforms should incorporate advanced charting tools and technical indicators that help traders to identify trends and opportunities in markets where low spreads can make a significant difference to profitability. 

Also, these platforms might offer automated trading capabilities, allowing you to capitalize on tight spreads without constant market monitoring. Risk management tools, including stop-loss and take-profit orders, become crucial in a low-spread environment, helping to protect gains and limit losses by automatically executing trades at predetermined levels. 

Furthermore, educational resources and demo accounts are essential features, enabling traders to understand how spreads work across different assets and practice strategies without financial risk. Finally, mobile trading apps extend the functionality of desktop platforms, ensuring traders can react swiftly to market movements from anywhere, at any time. The synergy between low spreads and these sophisticated trading tools and features allows traders like you to optimize your strategies, manage risks effectively, and enhance your trading performance.

Tips to Get Started Trading with a Low-Spread Broker

Opening a FOREX trading account is easy. Once you have chosen your preferred low-spread broker, you must start by filling out an application form as part of the “open account” process. It is normal that you will be asked to provide two documents. These are usually your national identity documents and proof of address. This is part of Know Your Customer (KYC) regulations. Remember that some brokers have slightly different requirements than others.

Once your account has been approved, normally one to two days after you make the application, you will be able to fund your account by making the first deposit. After your account is funded, you can start to trade.

How to Improve Your Knowledge of FOREX Trading

A trading Website like en.Arincen.com is a great place to start. We have a large list of curated articles that can give you all the information you need on common FOREX trading terms, like pips, spreads, leverage, and support and resistance. We have also taken the time to prepare detailed articles on important topics, such as FOREX trading strategies. Additionally, once on our Website, you will find helpful video courses that cover the basics of FOREX trading. With this range of knowledge, you will be well on your way to trading success.

Remember also that your broker itself will normally have developed a detailed education and research repository. That is also a good place to bolster your FOREX knowledge, with the extra benefit that your broker’s information will be slanted toward its own platform and resources, which makes it doubly useful.

As such, it’s relatively easy to improve your knowledge of FOREX trading. All the following items should be part of a low spread broker arsenal, and they should all help you improve your knowledge of FOREX trading.

Educational Content: For beginners, educational resources are crucial. Look out for platforms offering webinars, tutorials, articles, and even demo accounts to familiarize users with trading concepts.

Analytics Tools: The platform should offer robust analytical tools and many methods to evaluate trader performance. This includes historical returns, risk metrics, trading strategies, and more.

Community Engagement: A vibrant community can provide peer reviews, insights, and discussions, which can be invaluable for both novices and experienced traders.
Real-time Data: This is the lifeblood of social trading. Make sure your broker gives you access to live market data, news updates, and economic calendars that can help in making informed decisions

Let’s Recap

In this article about the best low spread FOREX brokers for 2024, we've delved deeply into what makes a broker stand out in the fiercely competitive FOREX market and beyond. The main takeaway is that you should always carry out diligent research in selecting a broker that aligns with your trading strategy and goals. This will help you to understand the intricacies of spreads and how they influence your trading costs and profitability. 

Beyond costs, we stressed the importance of choosing a broker that offers a robust trading platform, diverse financial instruments, and excellent customer service to support your trading journey. As the FOREX market continues to evolve, staying informed and vigilant against unfair practices will be key to navigating the complexities of trading. By focusing on brokers that not only promise but also deliver on their low-spread offerings, you'll be well-positioned to thrive in the dynamic world of FOREX trading.

Arincen’s Review Methodology

The team at Arincen collected more than 120 pieces of data covering in excess of 100 licensed FOREX companies. Data collection was done in three ways:

1. Companies’ websites.

2. Other websites that have ranked FOREX companies.

3. A survey questionnaire (referred to here as Survey “1”) was sent to the companies invited to participate in the exercise. We have identified 13 criteria for our assessment, each containing several aspects and carrying its relative weight. These include licensing, deposits and withdrawals, number of assets, etc. 

Afterward, we validated the data by:

1. Registering with FOREX companies as a secret shopper and/or as Arincen.

2. Survey number “2,” in which we asked these companies’ customers for important feedback and past experience.

The next step saw us evaluate and rank each company, relying on the hard work of 15 Arincen employees. We were cautious in ensuring the most accurate assessment possible, including taking into account different languages, as well as the various mobile-app operating systems, e.g., Apple, Samsung, etc.

To add credibility to our research project, we sent a third and final survey (referred to here as Survey “3”) to enable participating FOREX companies to evaluate our own research and whether it accurately reflects the realities on the ground. We were fortunate enough to receive a mark of 9.9 out of 10! We have kept to a minimum the margin of error, which stood at a measly 1%. To learn more about how we came up with the evaluation, please click here.