In forex, the ammount of pips between the selling price and the buying price of two currencies is called spread. These three types of spreads are used in forex. Fixed spread – difference between ASK and BID is kept constant and do not depend on market conditions. Fixed spreads are set by dealing companies for automatically traded accounts. Fixed spread with an extension – certain part of a spread is predetermined and another part may be adjusted by a dealer according to market. Variable spread – fluctuates in correlation with market conditions. Generally variable spread is low during times of market inactivity (approximately 1-2 pips), but during volatile market can actually widen to as much as 40-50 pips. This type of spread is closer to real market but brings higher uncertainty to trade and makes creation of effective strategy more difficult.
Forex brokers get the currency rates from their bank and usually earns profit by widening the spread but there are brokers who dont earn by widening and they add nothing to the spread but they charge their commission when you trade. MAYZUS Forex brokers have EURUSD spread as low as 0+ pips and they dont even charge commission when you trade. Other brokers with 0+ pips spread include Alpari UK, AssetsFX, Brokers Star, CFH Markets, FastBrokers, FinFX, FXOpen, JFX, Liquidex and MBCFX. There are other brokers in the market offering spreads upto 2 pips which is concidered as a low spread in the forex market.

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