Best Brokers For Zero Spread Accounts

The Ultimate Guide to

Choosing a Broker
For Zero Spread Accounts

Not sure which broker is right for you?

Don’t worry - we’ve got you covered. In this guide, you’ll learn:

• Why Hotforex scored high for zero spread accounts (Jump to section)
• Who Hotforex is (and isn’t) suitable for (Jump to section)
• An in-depth feature comparison of the top #3 brokers (Jump to section)
• An overview on zero spread accounts (Jump to section)

Ready?

Part 1

Why Choose Hotforex
For Zero Spread Accounts?

Hotforex scored best in our review of the top brokers for zero spread accounts, which takes into account 120+ factors across eight categories. Here are some areas where Hotforex scored highly in:

Hotforex offers one way to tradeForex. If you wanted to trade EURUSD

The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.

Hotforex have a B trust score, which is good. This is largely down to them being regulated by CySEC, segregating client funds, being segregating client funds, being established for over 8

Trust Score comparison

The second thing we look for is the competitiveness of the spreads, and what fees they charge. We’ve compared these in detail in part three of this guide.

Part 2

Who Hotforex is (& Isn’t)
Suitable For

As mentioned, Hotforex allows you to trade in one way: Forex.

To trade with Hotforex, you’ll need a minimum deposit of $5. Hotforex offers a range of different account types for different traders including a micro accountmini account, vip account .

Finally, Hotforex isn’t available in the following countries: U.S., CA, JP, SD, SY, KR.

Part 3

A Comparison of Hotforex vs. vs.

Want to see how Hotforex stacks up against and ? We’ve compared their spreads, features, and key information below.

Spread & fee comparsion

Comparison of account & trading features

Part 4

What are Zero Spread Accounts in Forex Trading?

Trading accounts offered by brokers that have no difference between the bid and ask price are known as Zero Spread accounts. Such accounts allow traders to know in advance what their entry and exit levels will be when they open positions. Zero spread accounts are also helpful for calculating non-trading losses, such as slippage, and are ideal for some forex strategies including high-frequency scalping and day trading.

When Forex brokers started offering their services, they touted their low spreads and low commission rates as their primary marketing tools. However, with the advent of Electronic Communication Network (ECN) brokers and Straight Through Processing (STP) brokers competing for best price, zero spread accounts became the newest trending marketing tool forex brokers used to entice potential traders.

Advantages of Zero Spread Accounts

Zero Spread Accounts offer small traders the chance to compute their executions precisely, without the issue of tightening or widening of spreads. For example, when trading on the wrong side of the move of a USD/JPY during a big fundamental data release, like the Rate Decision of the Bank of Japan, having a Zero Spread Account would allow traders to change their trade bias accordingly, without the additional damage to their trading account caused by a spiking forex spread (which could be more than 300 pips greater than a normal spread) on a normal forex account.

Disadvantages of Zero Spread Accounts

However, there are disadvantages to Zero Spread Accounts. Forex brokers also have to make money in various other ways. These brokers might offer fixed commissions (thus, simulating the fixed spread accounts), smaller/bigger leverage, bigger initial account opening size, slightly slower execution speeds, non-application of Negative Balance Protection, tighter Margin Calls and Stop Loss Levels, or various permutations of the above-mentioned tactics.

What to look out for when comparing brokers that offer Zero Spread Accounts

One of the first things to look out for when comparing zero spread account brokers is how much commission they charge. Some brokers charge a nominal commission or fee, as well as adding a small markup to the spreads, whilst claiming to be zero spread brokers. These are not genuine zero spread/low commission brokers and should probably be avoided.

There are also brokers who offer zero spreads without commission. They tend to be dealing desk brokers who do not send clients’ positions into the open market (liquidity providers).

Brokers that offer Zero Spread Accounts

In order to ensure maximum protection, traders should only consider regulated brokers. Zero spread accounts are available from regulated brokers such as XM and RoboForex.

Conclusion

In conclusion, zero spread forex trading offers new traders the opportunity to try out currency trading without being exposed to high transaction costs.

However, the Milton Friedman’s economic principle that “there is no such thing as a free lunch” also applies to the Forex market, and especially to Zero Spread Accounts. Traders therefore need to examine commission, fees, and tactics employed by the broker that may provide them with the opportunity to make money from their clients.