10 Lowest Spread Forex Brokers 2024

A forex broker is an individual or institution that provides traders access to platforms for buying and selling various financial instruments, including currencies, commodities, indices, and more. Forex brokers act as middlemen between retail traders and global financial markets. These brokers facilitate transactions electronically, offering tools, resources, and support to help traders trade in the forex market. 

The spread is the difference between the bid price (sell) and the ask price (buy) of a currency pair. It’s a trading cost and is measured in pips. A lower spread in forex means a smaller difference between the bid and ask price, resulting in lower trading costs. It’s ideal for active traders, especially for scalpers. Lower spread is commonly found in major currency pairs like EUR/USD due to high liquidity. Lower spreads help maximize profits by minimizing transaction expenses. Many forex brokers offer low spreads and also provide advanced tools, fast execution speeds, and flexible leverage options to enhance the trading experience.

With numerous online forex brokers available, finding the right one with low spreads can be challenging. In this article, we’ve compiled a list of the best low-spread forex brokers. Our goal is to assist you in finding trustworthy partners that align with your trading objectives while ensuring a smooth and efficient trading experience.

A List of Top 10 Lowest Spread Forex Brokers

• BlackBull Markets:  From 0.1 pip to 0.8 pip
• ThinkMarkets: From 0.4 to 0.6 Pip 
• Exness: Starting From 0.1 Pip to 0.3 Pip 
• ActivTrades: Starting From 0.5 Pip 
• JustMarkets: from 0.1 to 0.3 Pip 
• HotForex: Starting from 0.6 pip on the Pro Account 
• XM: Starting from 0.6 Pip 
• FBS: Starting from 0.7 Pip 
• IC Markets: Starting From 0.8 Pip 
• Pepperstone: Starting From 1 Pip 

Best Low Spread Forex Brokers ( Compared and Reviewed)

What is a Forex Broker?

A forex broker is a financial services company that provides traders with access to the foreign exchange market, enabling them to trade currency pairs. These brokers act as intermediaries by connecting traders to liquidity providers and offering platforms for seamless trade execution and market analysis. Operating during global market hours, forex brokers ensure continuous trading opportunities throughout the week.

Apart from currency trading, forex brokers typically offer CFDs on assets such as commodities, indices, stocks, and cryptocurrencies. These instruments allow traders to benefit from price movements without owning the underlying assets. Forex brokers may also provide leverage, advanced analytical tools, and educational materials to help traders enhance their strategies and navigate the complexities of financial markets effectively

What is a spread in Forex Trading?

The spread refers to the difference between the bid price (the price at which you can sell) and the ask price (the price at which you can buy) in forex trading. It represents the cost of initiating a trade and is typically measured in pips. For example, if the bid price of EUR/USD is 1.1050 and the ask price is 1.1052, the spread is 2 pips.

Spreads can be fixed or variable. Fixed spreads remain constant regardless of market conditions, while variable spreads fluctuate based on factors like market volatility, liquidity, and trading sessions. Brokers often offer lower spreads on major currency pairs like EUR/USD due to high liquidity, making them ideal for traders seeking cost-efficient trades. Understanding spreads helps traders optimize their strategies, especially for high-frequency trading approaches such as scalping and day trading, where minimizing costs is essential for profitability.

How to Choose the Best Low Spread Forex Broker: Step-by-Step Guide

To choose the best low-spread forex broker, follow the steps below:

• Step 1: Identify your trading needs and goals. Are you a day trader, swing trader, or long-term investor? Understanding your style will help you prioritize low spreads and other features.
• Step 2: Research forex brokers offering low spreads. Start by searching online and reading reviews from other traders.
• Step 3: Make a shortlist of brokers that stand out for offering low spreads. Visit their websites and explore their offerings.
• Step 4: Check the spread types offered. Look for brokers offering fixed or variable spreads, and compare them across different currency pairs.
• Step 5: Review the broker’s regulation and licensing status. Ensure the broker is regulated by reputable authorities to ensure your funds are safe.
• Step 6: Evaluate the broker’s trading platform. The platform should be user-friendly, offer advanced tools, and support efficient trade execution.
• Step 7: Check the account types and deposit requirements. Choose a broker that offers low minimum deposits and account types suited to your trading preferences.
• Step 8: Look at the leverage options. Ensure the broker offers leverage that matches your risk tolerance and trading strategy.
• Step 9: Compare trading fees and non-trading costs. These may include commissions, swap rates, or withdrawal fees, which can affect your overall trading costs.
• Step 10: Test the broker’s customer support. Ensure they offer responsive, helpful support for any issues you may encounter during trading.
• Step 11: Compare all factors, including spreads, platform features, regulations, and fees. Make your final choice based on the broker that best meets your needs.

What Factors Affect Spreads in Forex?

The spread in forex trading refers to the difference between the bid and ask price of a currency pair. Spread can directly impact the profitability of forex trading. Several factors influence the size of the spread, which varies across different brokers, market conditions, and currency pairs. Below are the key factors that determine the price of spreads in forex trading.

1. Market Liquidity

Market liquidity plays a significant role in determining the spread. Liquidity refers to the ability to buy or sell a currency pair without affecting its price. Highly liquid currency pairs, such as EUR/USD or USD/JPY, tend to have tighter spreads because there is a higher volume of trades, making it easier for market participants to transact without significant price movement. In contrast, illiquid pairs with lower trading volume may experience wider spreads due to the lack of sufficient buyers and sellers in the market.

2. Economic Data and Events

Important economic data releases and events can increase market volatility and affect spreads. For instance, announcements related to interest rate decisions, GDP growth, or employment reports often lead to sudden market movements, causing spreads to widen temporarily. High-impact news events, such as geopolitical developments or economic crises, can also trigger increased market uncertainty, which tends to widen spreads as liquidity decreases and traders become more cautious.

3. Trading Hours

The time of day also influences spread sizes. Forex markets operate 24 hours a day, but liquidity varies depending on the trading session. The European and US sessions are typically the most active, leading to tighter spreads as more participants trade in the market. Conversely, during off-peak hours, such as the Asian session, spreads can widen due to lower trading volumes and reduced market participation. This means that spreads tend to be tighter during periods of high market activity and broader during quieter times.

4. Currency Pair Characteristics

The nature of the currency pair itself influences its spread. Major currency pairs, such as EUR/USD, GBP/USD, and USD/JPY, are typically more liquid, leading to narrower spreads. On the other hand, exotic currency pairs, which involve currencies from smaller or emerging-market economies, tend to have wider spreads. This is because exotic currencies have lower liquidity and higher volatility, which makes trading in these pairs riskier and more expensive.

5. Broker’s Pricing Model

The pricing model used by the forex broker can impact the spread offered to traders. There are two primary pricing models: the market maker model and the ECN (Electronic Communication Network) model. In the market maker model, brokers set their own bid and ask prices and may offer fixed spreads. In contrast, ECN brokers provide access to the interbank market, where spreads can fluctuate based on real-time market conditions, leading to variable spreads. Brokers with lower overhead and operational costs may offer tighter spreads, while those with higher costs may widen spreads to compensate.

6. Central Bank Policies and Interest Rates

Central banks play a pivotal role in shaping market sentiment and influencing spreads. When central banks change interest rates or announce new monetary policies, it can lead to shifts in currency values. The anticipation of interest rate changes often causes increased volatility and can widen spreads as traders adjust their positions based on the expected outcomes. For example, if a central bank raises interest rates, it may attract foreign capital, tightening the spread for that currency pair.

7. Volatility

Market volatility directly affects spread sizes. When market volatility is low, spreads are typically narrower as the market is more stable, and liquidity is abundant. However, during periods of heightened volatility, such as during significant economic events or political uncertainty, spreads tend to widen. This is because the risk of price swings increases, and liquidity may decrease as market participants become more cautious.

8. Broker’s Spread Policy

Different brokers have different policies regarding spreads. Some brokers offer fixed spreads, meaning the spread remains constant regardless of market conditions. Other brokers offer variable spreads, where the spread fluctuates depending on market conditions, such as liquidity and volatility. Brokers may also offer tight spreads during specific times of the day or for particular currency pairs, depending on their trading model and access to liquidity providers.

9. Market Maker vs. ECN Broker

The type of broker you choose can significantly affect the spreads you pay. Market makers typically offer fixed spreads that remain the same regardless of market conditions, but they may be wider to account for the broker’s profit margin. ECN brokers, however, offer variable spreads that can be very tight during periods of high liquidity but can widen during times of low liquidity or increased market volatility. ECN brokers often provide direct access to the interbank market, allowing for more competitive pricing.

10. Economic Stability of Countries Involved

The economic stability of the countries whose currencies are being traded also affects spread size. Stable economies with strong financial systems tend to have narrower spreads due to higher investor confidence and greater liquidity. In contrast, currencies from countries with unstable economies, weaker financial systems, or higher political risk tend to have wider spreads as traders demand a premium to compensate for the increased risk of holding those currencies.

11. Supply and Demand in the Market

The supply and demand for specific currencies can influence the spread. In times of high demand for a particular currency, the bid-ask spread may narrow as more buyers and sellers participate in the market. Conversely, when there is low demand or a lack of liquidity for a currency pair, spreads tend to widen as fewer market participants are willing to transact at specific price levels.

What Pairs have the lowest spread in Forex?

The major currency pairs usually have the lowest spreads due to their high liquidity and the large number of market participants. These pairs, involving the most traded currencies in the world, are highly liquid because they are actively traded by banks, institutions, corporations, and retail traders across global markets. As a result, the bid-ask difference is narrow, making trading more cost-effective. Here’s a breakdown of some of the most popular major pairs with the lowest spreads:

EUR/USD:

The EUR/USD is the most traded currency pair in the world, offering very tight spreads. Due to its high liquidity and low volatility, it provides traders with consistent and narrow spreads, making it ideal for both short-term and long-term trading.

GBP/USD:

The GBP/USD, also known as the “Cable,” is another major pair that benefits from high liquidity. While it can have slightly wider spreads compared to EUR/USD, it still remains relatively tight, especially during the European and US trading sessions.

USD/JPY:

The USD/JPY is a highly liquid pair, particularly popular among institutional traders. Its spread is typically very tight, especially during peak market hours, making it an attractive option for traders looking for cost-efficient trades in the Asian market.

USD/CHF:

The USD/CHF, often referred to as the “Swissie,” tends to have low spreads due to its strong liquidity. As the Swiss franc is considered a safe-haven currency, its trading volume remains high, allowing for narrow spreads, particularly during European and US sessions.

EUR/JPY:

The EUR/JPY benefits from high trading volume due to the strong economic relationships between the Eurozone and Japan. The spread is typically narrower compared to many other cross-currency pairs, making it a popular choice among traders seeking cost-effective trades.

GBP/JPY:

The GBP/JPY is known for its volatility, but it often offers competitive spreads due to the liquidity of both the British pound and the Japanese yen. While its spreads can widen during times of high volatility, they are typically low during regular trading hours.

What is the difference between spread and commission in Forex?

In Forex trading, both spread and commission are costs that traders incur when executing trades. While they both contribute to the overall trading cost, they operate differently. The spread is the difference between the buy and sell prices of a currency pair, while the commission is a separate fee charged per transaction, often seen with brokers offering ECN/STP accounts.

Differences Between Spread and Commission

Frequently Asked Questions: (FAQs)

Which Forex Brokers Have the Lowest Spread?

  The lowest spread forex brokers include: 

•  BlackBull Markets:  From 0.1 pip to 0.8 pip
• ThinkMarkets: From 0.4 to 0.6 Pip 
• Exness: Starting From 0.1 Pip to 0.3 Pip 
• ActivTrades: Starting From 0.5 Pip 
• JustMarkets: from 0.1 to 0.3 Pip 

These brokers are ideal for traders looking for cost-efficient trading, especially scalpers and day traders. Always compare account types, trading conditions, and commission fees to choose the best broker for your strategy.

What is the cheapest Forex Broker?

The cheapest forex brokers are those that offer low spreads and minimal commissions. Here is the list of the cheapest Forex brokers : 

•  BlackBull Markets:  From 0.1 pip to 0.8 pip
• ThinkMarkets: From 0.4 to 0.6 Pip 
• Exness: Starting From 0.1 Pip to 0.3 Pip 
• ActivTrades: Starting From 0.5 Pip 
• JustMarkets: from 0.1 to 0.3 Pip 

How Does Low Spread Brokers Earn Money?

Low-spread brokers earn money primarily through:

1. Commission Fees: Many low-spread brokers charge a commission per trade instead of relying solely on spreads. For example, ECN brokers offer spreads as low as 0.0 pips but charge a fixed fee per lot traded.
2. Volume-Based Trading: Brokers with low spreads attract high-volume traders, such as scalpers and institutional clients. The increased trading volume generates significant revenue from small fees per trade.
3. Market Markup: Some brokers slightly mark up raw market spreads, earning a small profit on every trade.
4. Additional Fees: Revenue can also come from overnight swap fees, inactivity charges, or currency conversion fees, depending on the broker’s policies.

What is a Zero Spread Account?

A zero spread account refers to a forex trading account where the bid and ask price difference is 0.0 pips under normal conditions. Traders pay no spread but are charged a fixed commission per trade. This is why a spread account is a cost-effective option for scalping and high-frequency trading strategies.

Is there any Zero Spread Forex Broker?

Yes, there are zero spread accounts. Usually, ECN accounts are zero-spread accounts. These accounts provide direct access to the interbank market, offering raw spreads that can be as low as 0.0 pips during normal market conditions. Instead of spreads, brokers charge a commission per lot traded, making ECN accounts a cost-efficient choice for scalpers and high-volume traders.

How does Zero Spread Brokers Earn Money?

Zero-spread brokers earn money primarily through commissions and additional fees, as they do not profit from spreads. Here’s how:

1. Commission Per Trade: Brokers charge a fixed commission for each lot traded. This fee replaces the spread as their primary revenue source.
2. Trading Volume: Zero-spread accounts attract high-frequency traders, scalpers, and institutional clients who trade in large volumes. The more trades executed, the higher the broker’s income from commissions.
3. Overnight Swap Fees: Brokers may earn from swap fees applied to positions held overnight, depending on market interest rates and the currency pairs traded.
4. Markup on Non-Forex Trades: While forex trades have zero spreads, brokers might apply spreads or fees on other instruments, such as commodities or indices.
5. Ancillary Fees: Some brokers charge for account maintenance, withdrawals, or inactivity, adding to their revenue streams.

What’s the difference between a raw spread account and a standard account?

A Raw Spread Account Refers to a trading account that offers ultra-tight spreads, often starting from 0.0 pips, which reflect the raw market prices. Usually, ECN (Electronic Communication Network) accounts are raw spread accounts. In these accounts, brokers charge a fixed commission per lot traded, allowing traders to access the most competitive spreads directly from the interbank market. Raw spread accounts are ideal for professional traders, scalpers, and high-frequency traders who require precision in trading costs.

On the Other Hand, a Standard Account refers to a trading account where the broker includes a markup on the spread, typically starting from 1.0 pip or higher. Standard accounts are generally commission-free, with the broker’s revenue coming from the wider spread. These accounts are more suitable for beginner traders or those who prefer a more straightforward fee structure without additional commission charges.

Are Low-Spread Forex Brokers Good for Scalping?

Yes, low-spread forex brokers are ideal for scalping. Low-spread forex brokers refer to brokers that offer tight spreads, often starting from 0.0 pips, reducing trading costs and allowing scalpers to make multiple trades quickly. These brokers also provide fast execution and, in many cases, commission-based accounts, making them perfect for capturing small price movements with minimal costs.

Is Low Spread Forex Brokers Good for Day Trading?

Yes, low-spread forex brokers are good for day trading. Low spread brokers refer to brokers offering tight spreads, often starting from 0.0 pips, which reduce trading costs. When a trader makes multiple trades throughout the day, lower spreads allow for greater profitability from small price movements. Additionally, low-spread brokers often provide faster execution speeds, enabling traders to react quickly to market changes.

Can You Negotiate Spreads with a Forex Broker?

Yes, you can negotiate spreads with your forex broker, especially if you’re a high-volume trader or have a premium account. Brokers may offer tighter spreads to retain valuable clients, match competitors’ offers, or reward loyalty. The factors influencing negotiation include trading volume, account type, and the broker’s flexibility. To succeed, highlight your value as a client, compare competitors’ spreads, and approach negotiations professionally. If spreads cannot be lowered, consider requesting discounts or rebates to reduce trading costs effectively.

Final Verdict:

Finding a forex broker with low spreads can significantly impact your trading profitability, especially for high-frequency or scalping strategies. We have thoroughly reviewed the top forex brokers with competitive spreads, focusing on cost-effectiveness, regulation, and trading conditions. Here are the best low-spread forex brokers:

• BlackBull Markets: Offers spreads starting as low as 0.1 pip, making it an excellent choice for traders seeking precise cost management.
• ThinkMarkets: Known for its tight spreads ranging from 0.4 to 0.6 pips, ThinkMarkets is ideal for traders focused on competitive pricing.
• Exness: Features spreads as low as 0.1 to 0.3 pips, along with instant execution and high reliability.
• ActivTrades: FCA-regulated and offering spreads starting at 0.5 pip, ActivTrades provides a blend of low costs and excellent support.
• JustMarkets: With spreads ranging from 0.1 to 0.3 pips, JustMarkets is suitable for traders prioritizing affordability.
• HotForex: Offers spreads starting at 0.6 pip on its Pro Account, combined with easy-to-use trading platforms.
• XM: Known for spreads starting at 0.6 pip, XM is a popular choice among traders for its transparency and bonus programs.
• FBS: Provides spreads starting at 0.7 pip, making it a good option for traders seeking high leverage and low entry barriers.
• IC Markets: Offers low spreads starting from 0.8 pip, supported by its deep liquidity and fast execution.
• Pepperstone: Provides spreads starting at 1 pip, with reliable execution and top-tier regulation for peace of mind.

These brokers cater to traders looking for minimal trading costs without compromising on quality and security. Choose a broker based on your trading style and preferences to optimize your forex trading experience.