myfxbook launches a spreads comparison engine

We reported about this trend almost two years ago here as we've noticed an influx of sites with various spread

We reported about this trend almost two years ago here as we’ve noticed an influx of sites with various spread comparison engines. One of the first to enter the market was FX Intelligence which managed to place itself on several broker websites like MB Trading‘s and others. The conclusion two years ago was this:

“In my opinion, these sites are widgets with sites and not sites with widgets – so I can’t really see a real business model developing here. It’s also hard for Google to index these sites as they got little or no content at all and once big sites like fxstreet (hint hint Francesc) or forexfactory develop such a widget themselves (it costs almost nothing to do so) these independent sites will simply vanish.”

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Ever since forexfactory released its own version of broker quotes under its Markets tab. Now its myfxbook’s turn. myfxbook here is utilizing its access to thousands of live accounts to aggregate average spreads and in a way very similar to FX Intelligence’s marks the lowest spread per the most traded currency pairs. It has been suggested in the industry that sites like currensee, forexfactory, mt4i, myfxbook and others who get to access real time trading statistics can utilize this access to create various new features, publish statistics or even sell this data to third parties like hedge funds and others. For now we only know about public tools like those spread comparison engines.

Although to a novice trader this may seem like the perfect tool when selecting a broker it also can be very misleading for two reasons:

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1. as myfxbook themselves mention “Although spreads are a major factor in choosing a broker, they do not represent execution quality, slippage, commissions, or any other fees of a broker.” This basically means that when actually placing a trade there at times may be slippage or additional fees which are not represented in this table.

2. spreads are an overestimated buzzword – while tight spreads are indeed highly important for traders in this market and may be the difference between winning and losing strategy they are not the only factor to be considered when chosing a broker. However all novice traders care about is tight spreads because it’s a buzzword and because it’s what smart brokers market to them. What really should also matter to them however is the actual execution – a certain broker may show tighter spread than others but execution itself fails time after time for various reasons. If a broker shows 0.3 on EURUSD but keeps rejecting your orders – what does this tight spread really mean?

Smart trader would need to test a combination of factors including spread and execution, over time, before choosing the right broker.

Forex Magnates monitors the traffic and performance of forex media sites like myfxbook in its Quarterly Retail Forex Industry Report.
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