Variable Spreads Vs Fixed Spreads

One of the major items in the market today is variable spreads , expecially with US brokers. The actual thought is that you can get in on 0 or 1 maybe 2 pips spread on variable spread, but realistically, that sometimes is not the case.

Here is the reality I am seeing on one broker. you have fixed MINIMUM spreads, so no matter what your tagged for 3-11 pips depending on the pair, then on news items that even have a minor effect, SHORTLY before the news is out, SPREAD is increased to double or triple the amount and held for several minutes.

Now your saying, "why would the broker change the spread prior to news items?"

only 2 reasons, to discourage scalpers and news traders, or to munipulate the market in thier favor. there is no law against them doing so other than the law of the consumer, IE: you don't like it MOVE close your account.


I am working on fully testing several MT4 brokers, 3 of which are variable spreads, I will be watching the following criteria;
1) number of trades skipped due to excessive spreads during entry.
2) number of loss's due to spread widening enough to catch a stop loss
3) number of late entries due to spreads.
4) overall pip gains between the different brokers.

Stay tuned