Does spread really matter in currency trading
Most people think they should invest money with a good and reputed broker. We would also have done the same if we were in your shoes because it helps to prevent scams and frauds. Brokers with a high spread are seen an indicator of trust because they are operating their services in a standard way which need them to charge higher fees for their services. However, you also need to keep in mind that you have to overcome the spread. If the spread is too large and you cannot get the trend in your favor for enough time, you will always be in loss for the higher spread. This article will try to explain if trading with higher spread can become a problem in your career. The trends are volatile and it is not easy to get a preferable trend. Many people use short-term strategy to avoid waiting a long time for the result.
Those who scalp the market are always trading with a big lot to earn huge amount of money. They are not following long-term trading strategy. In fact, they are happy to win 10+ pips in any trade. But when the spread becomes extremely wide it becomes nearly impossible for an individual to make a profit in a less volatile market. Even during high volatility, the traders have covered a widespread to ensure a decent profit. For this very reason, the pro-Aussie traders prefer brokers like Rakuten who offers tight spread even during the event of high impact news.
Being a scalper, it’s obvious you will be trading the market with high risk. Unless you have extensive demo trading experience you should never try to trade with your real money. Learn to trade this market by using a Forex demo account and it will help you understand the nature of this dynamic market. Though some of you might say spread doesn’t really matters when it comes to professional trading career, every single factor counts.
Skilled traders vs widespread
If you have skills in this industry, you can make your money without any problem. People do not practice their strategy and they have no plans. They also have no routine that they can follow and they end up losing their money. Making profit largely depends on how well you can perform on the market with your knowledge and skills. It does not grow in a day and you will need time and practice before you are making profit consistently. The higher spread should not be a problem for you if you can master the art of trading. Most reputed broker’s charges higher spread than the others because they are real and not going to run away with your money. It depends on your skill that is going to bring the return on your investment. If you think you are good with a higher spread because you do not want to take risks by losing your capital, it is a wise choice. Choosing an unknown broker for saving some few dollars is not a wise decision in Forex. If you can match your talent with the volatility, the spread would not be your problem. You do not need to place trades with every trend, only the best trends are important.
If the other broker is trying to get your deposit by offering you low spread, it is a scam. Your profit growth does not depend on your spread. It depends on your practice and your wisdom. You should analyze the market and use the indicators in your chart to find out about the possible trends.
However, you should keep an eye on the currency price movements. If the trend seems to be much higher, you should think again about your trading decisions. You can trade as long as the spread matches up with your account and trading plan.