Fixed Spreads Or Variable Spreads
In the markets, it is vital for any trader to look for an edge over the market in every way possible since statistically it always seems as though the game is rigged against traders. Thus, it is important to look at even the finer details of trading such as the type of spreads, and choose the one that gives you an edge considering your style of trading,
Fixed spreads by definition are spreads that do not change regardless of the market conditions. They do not vary with respect to the volatility or volume in the market. Your broker simply gives you the value of the spread and that is the one you pay every time you get into a trade. These types of spreads are generally high spreads, but they are beneficial when trading the less volatile markets. For people who mainly trade the Asian session, it is advised to use fixed spreads as they do not increase when the volatility in the markets is low.
Variable spreads by definition are spreads that change with respect to the levels of volatility in the markets. These types of spreads are generally low when the volatility in the market is high, and the opposite is true when the volatility is high. Variable spreads are usually beneficial to a trader that trades in volatile markets such as the US market or London Session. This is because at these times the spreads are very low since the volatility and volume are high due to a lot of participants at the time.
Most brokers who manipulate prices and slippage usually opt for the variable spreads since it is easier to manipulate the two when the broker can control the spreads at will. This is key to note when a trader is selecting which type of broker to use.