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Fixed vs variable rates for the euro
Choosing a Broker: A New Traders Guide

4.Fixed vs Variable

Transaction costs are a part of trading; there is no way around it. Brokers usually charge transaction costs in the way of spreads and commissions. Nevertheless, lower transaction costs are not always better. You need to take into account the whole user-experience and services provided by a broker to assess whether a broker has high or low transaction costs.

 

Read:

Forex Money Management Tips for Beginner Traders

Tips for Managing a Trading Journal Spreadsheet

Beginners Guide to Choosing Trading Platforms

 

That being said, brokers that offer a full-range of services (advisory brokers) usually have much higher transaction costs than execution-only brokers. Since your goal is to become a consistently profitable trader on your own, we don’t advise to trade with full-service brokers.

Trading is best learned through a thorough education in addition to trials and errors, and an execution-only broker is essentially everything you need to have access to the markets.

 

 

Also, the more services and features an execution-only broker provides (think: trading tools and market commentary and research), the higher your transaction costs will be. Certain market conditions can also increase your transaction costs significantly through slippage, which is where a broker with fixed spread has an obvious advantage compared to brokers with variable spreads.

Fixed spreads ensure that you always know your transaction cost in advance, anytime you trade.  

 

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