Zero Spread accounts are just like basic trading accounts and have similar ask price and bid price. It is very useful especially if you want to get to know more about how to do calculations on non-trading losses and one of these is the slippage. Way back before the introduction of STP and ECN brokers to the market, all trading brokers were offering low spread or commission rates. But thanks to the advancement of technology that we have nowadays, better trading prices have been offered to traders. This is the start of the popularity of Zero Spread accounts.
Pros of Zero Spread Accounts
Low Spread and Low Commission
With Zero Spread accounts, traders can get low spreads and commission, making it a very suitable choice for day traders and those engaged in scalp trading.
Access To Live Market Spreads
With Zero Spread accounts, traders are given the chance to access live market spread without spending additional markup.
Change Trade Bias Easily
For small traders, Zero Spread accounts are great for you. You don’t have to widen your spreads with these accounts and if your bid is placed on the wrong side, you can easily change it without incurring any damages to the spread in your account.
Pricing Is From Different Liquidity Providers
Zero Spread accounts offer pricing which are from different liquidity providers. If you start a trade, the order price will be rightfully assured.
Cons of Zero Spread Accounts
Brokers don’t make a lot of money out of the trader’s Zero Spread accounts. Therefore, it is their instinct to find ways to earn some bucks from you. In this case, a Zero Spread accounts broker might require you higher leverage. Some brokers might not use negative balance protection for their own sake. Always be mindful of these brokers and choose a reputable one as much as possible.
For the past few years, Zero Spread accounts are gaining commendable popularity mainly because of its features that are particularly suited for beginners. Brokers are attracting more and more traders who are eager to experience and gain knowledge about Forex trading whilst not shouldering the entire transaction costs.
But then, you must be aware that nothing is free in the trading world. Even though your broker will encourage you to join because they won’t deduct commission or similar fees on your account, it is still important to examine the tactics played by your broker to get money from you.
Forex trading, including Zero Spread accounts, can be very tricky and difficult to handle even by experienced traders. There is already a lot of education about these accounts that you can check online and yet, even after learning a lot, it all comes down to your chosen platform. As much as possible, when you choose a platform for your Zero Spread account, it should be an industry-leader with a history of competence and reputation. The Zero Spread account must also be trusted and well-established.