Best Forex Broker Spreads

When deciding on a Forex Broker you need to think about the way in which you will be using your Forex account. These days many traders, especially beginners, will use automated systems to enhance their trading returns. Therefore it is important that you select a Forex Broker who is sympathetic to their use.

The difficulty when trying to employ an automated trading system is in finding a Forex Broker that will accept their use. Many brokers will have an official or non official policy on the use of automated Forex trading systems on their platforms.

This policy is likely to be stricter the more successful the robot becomes. Increased success brings increased use, which in turn eats into broker profits. To combat this Forex Brokers employ various tactics to make it difficult to trade automated Forex systems.

While some will reportedly close a trader’s account if they suspect a robot is being used, others use more underhand tactics to disrupt their use. A common tactic is to raise the spread during quieter market sessions when automated robots are more likely to trade. While this doesn’t actually prevent the robot from being used it can make it difficult for them to find trade entry points. This is particularly true of the many robots that are reliant on a low spread as part of their strategy.

And of course by raising the spread on trades taken, a bigger commission is earned by the Forex broker, leaving less profit for the trader. Best Forex Broker Spreads

Some Forex Robots will try to prevent the Broker from detecting that they are being used by offering a form of key protection. This will need changing frequently and is not an ideal solution. Ok so the broker may not be able to detect that a robot is placing the trades but this will do nothing to overcome the issue of increased spreads which effect the time of day rather than the actual mechanism of trade execution.

When selecting a Forex Broker to run your automated system on it is important to take account of the tactics employed. For this reason it is best to look for a broker who accepts the use of automated Expert Advisors and the strategy it employs. Selected Brokers will allow the use of EA’s, hedging and scalping strategies on their platform without penalty.

However this is only half the solution. There is no point in settling for a broker who accepts the use of automated systems and then puts up the spreads at the time of day that they are most likely to be used.

The second part to selecting a Forex broker is therefore to make sure that you keep an eye on the spreads. A low spread is good but make sure it remains that way at the times when your system is looking to trade. Be wary of the broker increasing the spread at times of low liquidity. In some instances, dependant on the strategy employed, it can be advantageous to look for a broker offering guaranteed fixed spreads. In this way you have a known constant to your trading. Best Forex Broker Spreads