spread vs commission, which one is more easy to make profit?

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Mrluck07
425
Mrluck07  
  • 52% (12)
  • 48% (11)
Total voters: 23
Trader_Patinhas
241
Trader_Patinhas  

I vote for commissions.

I believe that charging commissions (instead of profiting by increasing the spread) makes the interests of the broker and the trader better aligned.

When the broker profits by adjusting the spread offered to the trader, the broker's interest will be in opposition to the trader's interest, since the broker's profit can only be increased by reducing the trader's profit (or by increasing his/her losses).

Moreover, since the broker owns the MT5 server and knows at which price the trader placed his/her stop-loss protection order, unethical brokers can even quietly enlarge the spread for a fraction of second, just to "hunt" the stop-loss orders placed by its customers and profit more at their expenses.  

On the other hand, in the case of a broker who passes on the genuine market spread and profits exclusively by charging commissions, the broker interest turns out to be perfeclty aligned to the trader's interest, since the more the trader profits, more he/she will trade and more commissions will be generated.

This is why I trust much more in a broker that charges commissions.

Mrluck07
425
Mrluck07  
Trader_Patinhas:

I vote for commissions.

I believe that charging commissions (instead of profiting by increasing the spread) makes the interests of the broker and the trader better aligned.

When the broker profits by adjusting the spread offered to the trader, the broker's interest will be in opposition to the trader's interest, since the broker's profit can only be increased by reducing the trader's profit (or by increasing his/her losses).

Moreover, since the broker owns the MT5 server and knows at which price the trader placed his/her stop-loss protection order, unethical brokers can even quietly enlarge the spread for a fraction of second, just to "hunt" the stop-loss orders placed by its customers and profit more at their expenses.  

On the other hand, in the case of a broker who passes on the genuine market spread and profits exclusively by charging commissions, the broker interest turns out to be perfeclty aligned to the trader's interest, since the more the trader profits, more he/she will trade and more commissions will be generated.

This is why I trust much more in a broker that charges commissions.

great explanation
EA-trader
651
EA-trader  

15 years ago , I noticed I was never getting filled on limit orders with a futures brokers, they were not using MT4. I would not get filled until price went 2 pips against me, so there .So it is a mistake  to think any is better than the other.All the coffers of internet trading sites are indirectly filled by brokers. 


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