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Alain Verleyen
Moderator
28693
Alain Verleyen 2013.03.09 10:25 
I would like to gather information on the advantages and disadvantages associated with different kinds of spread. It seems fairly obvious to every trader to find a broker with the lowest spreads. But personally I do not know the obvious implications of the choice floating or fixed.

Do you have any information? As much as possible not speculation but arguments based on facts. I think that might be useful to all traders if we can synthesize the knowledge and experiences of community MQL5.

Advantages of floating seems be  : a lower value on average, but widening on events which may trigger our stoploss.

Resources about spread :

Spread on chart (indicator)

Spread candle creator (indicator)

Forex broker spread comparison


Sergey Golubev
Moderator
52155
Sergey Golubev 2013.03.09 11:01  

I think - many (may be - most of) brokers are using floating spread which is increased or decreased especially during the forex news events.

 Anyway - thanks for the links to spead indicators - I think - they are very usefull. 

Documentation on MQL5: Standard Constants, Enumerations and Structures / Environment State / Symbol Properties
Documentation on MQL5: Standard Constants, Enumerations and Structures / Environment State / Symbol Properties
  • www.mql5.com
Standard Constants, Enumerations and Structures / Environment State / Symbol Properties - Documentation on MQL5
gbemi1 AJAYI
831
gbemi1 AJAYI 2013.03.09 11:26  

Fixed spreads brokers are better But you can use floating spread broker as well with wisdom.

I'm using floating spreads broker and i have coded it in my EA not to open order if spreads is more than 0.5 pip(s)

Documentation on MQL5: Standard Constants, Enumerations and Structures / Environment State / Symbol Properties
Documentation on MQL5: Standard Constants, Enumerations and Structures / Environment State / Symbol Properties
  • www.mql5.com
Standard Constants, Enumerations and Structures / Environment State / Symbol Properties - Documentation on MQL5
Alain Verleyen
Moderator
28693
Alain Verleyen 2013.03.09 11:29  

It's very annoying that we can edit first post after first comment. Anyway...

Another resource very useful : Forex broker spread comparison

Alain Verleyen
Moderator
28693
Alain Verleyen 2013.03.09 11:31  
gbemi1:

Fixed spreads brokers are better But you can use floating spread broker as well with wisdom.

I'm using floating spreads broker and i have coded it in my EA not to open order if spreads is more than 0.5 pip(s)

Yes very useful but only effective for you entry. What about widen spread that hit your stoploss (exit) ? I don't see a way to prevent this.
gbemi1 AJAYI
831
gbemi1 AJAYI 2013.03.09 11:39  
angevoyageur:
Yes very useful but only effective for you entry. What about widen spread that hit your stoploss (exit) ? I don't see a way to prevent this.

That is one of the reason why i take this measure to prevent it. So that my EA will not open trade when there is widen spreads.

Even most of the broker who are using fixed spreads are charging 2-3pips. And this is too much for me. So, i prefer, floating spreads with my system, but not suitable for scalping.

Documentation on MQL5: Standard Constants, Enumerations and Structures / Environment State / Symbol Properties
Documentation on MQL5: Standard Constants, Enumerations and Structures / Environment State / Symbol Properties
  • www.mql5.com
Standard Constants, Enumerations and Structures / Environment State / Symbol Properties - Documentation on MQL5
Alain Verleyen
Moderator
28693
Alain Verleyen 2013.03.09 12:20  
gbemi1:

That is one of the reason why i take this measure to prevent it. So that my EA will not open trade when there is widen spreads.

Even most of the broker who are using fixed spreads are charging 2-3pips. And this is too much for me. So, i prefer, floating spreads with my system, but not suitable for scalping.

  • not open trade when widen spread : I understand well, it help, but what if spread widen when you have to close, your stoploss can be taken here because of floating spread. That would not have happened with a fixed spread.
  • 2-3 pips : what pairs are you talking about ? I have a broker which offer fixed spreads from 0.8 pips (0.00008).
  • floating not suitable for scalping ? You amaze me I thought exactly the opposite. Scalping is very short in time, so you may use it (with control like you told) with success no ?
Simon Gniadkowski
Moderator
17963
Simon Gniadkowski 2013.03.09 14:14  
angevoyageur:
  • not open trade when widen spread : I understand well, it help, but what if spread widen when you have to close, your stoploss can be taken here because of floating spread. That would not have happened with a fixed spread.
Only for a SELL,  a BUY's SL and TP is not effected.
Alain Verleyen
Moderator
28693
Alain Verleyen 2013.03.09 14:25  
RaptorUK:
Only for a SELL,  a BUY's SL and TP is not effected.
And why not ?
Simon Gniadkowski
Moderator
17963
Simon Gniadkowski 2013.03.09 14:57  
angevoyageur:
And why not ?
A BUY is closed at Bid, we perceive a change in spread as a changing in Ask relative to Bid,  so the Spread widening because Ask moves relative to Bid can cause a Sell's SL to be hit or for it's TP not to be hit.  In reality a widening spread can also be a move in Bid relative to Ask,  but we wouldn't usually perceive this as a change in spread but just as the Bid price moving.
gbemi1 AJAYI
831
gbemi1 AJAYI 2013.03.09 15:17  
angevoyageur:
  • not open trade when widen spread : I understand well, it help, but what if spread widen when you have to close, your stoploss can be taken here because of floating spread. That would not have happened with a fixed spread.
  • 2-3 pips : what pairs are you talking about ? I have a broker which offer fixed spreads from 0.8 pips (0.00008).
  • floating not suitable for scalping ? You amaze me I thought exactly the opposite. Scalping is very short in time, so you may use it (with control like you told) with success no ?

My broker only deduct spreads when opening trade not when closing it. So when spread become widen when closing a trade, it doesn't affect me.

Most broker charge from 2-3 pips  fixed spread on EurUsd. there are little brokers who charge less than that.

Floating is not suitable for scalping because the spreads may become widen when you want to open order and it may remain widen till signal expire. (Example.: you want to enter into market and take 10pips and get out but spreads become widen to the extent that you have more spreads pip to cover than pip to gain.)

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