FX and CFD broker OctaFX, has announced that it has enabled trading on fixed spreads for USD denominated Micro accounts trading on the MetaTrader 4 platform.
Trading on fixed spreads carries both benefits and disadvantages, depending on the type of trader and the associated strategy for each portfolio.
Some of the benefits of trading with fixed spreads include having a set fee for each transaction, which cannot be influenced based on market conditions or liquidity levels.
Clients can easily decipher trends and critical levels on charts, as part of their strategy for both entry and closing of their positions.
Conversely, when trading with floating spreads, there is often the possibility of benefiting from lower spreads during times of high liquidity, thereby leading to lower fees paid by traders.
However, trades could be negatively influenced, as the spread could be widened to reflect changing market conditions, even while a position is already open, leading to a less appealing close price.
FBS CopyTrade Launches a New Card Scanning Feature!Go to article >>
For this reason, trading on fixed spreads is often recommended for long-term trading in order to assure that market conditions cannot alter the fee paid on any trade.
Moreover, there are often times when short-term traders can also benefit from fixed spreads. The simple benefit of easily calculating the point of entry and exit from a position, can lead to easier strategic assessments for short-term traders, including scalpers, who tend to incur a very high trading volume turnover.
According to the OctaFX announcement, traders who do not currently have a micro account with a base of USD can open a new account for trading on the MT4 platform.
It is interesting that OctaFX has opted to incorporate the fixed spreads on the MT4 platform, as the FX space continues to shift toward the upgraded MT5 platform, following Metaquotes’ decision to stop selling and offering support for MT4.
Since OctaFX has already added access to the MT5 trading platform, it is always a possibility that fixed spreads will be added to other platforms at some point in the future, although this is pure speculation and the broker has yet to address its future plans regarding this matter.
OctaFX has also enabled trading on cryptocurrency CFDs, further diversifying its clients’ options and adhering to the rising global demand for digital currencies.