So far in 2021 the markets have been returning to calm following the extreme volatility seen last year. This has had a knock-on effect on brokers spreads, enabling spreads to be reduced significantly. For traders it is vital to monitor your brokers spreads, as every pip can cost around $10 per lot, on each side of the trade!
So who is the best brokerage to trade with in 2021? We’ve used TradeProofer’s data for January 2021 to calculate the lowest spread at over 50 different brokers on the major symbols, so that regardless of what symbols you trade we’ve found the lowest spread forex brokerage for you!
The Australian dollar / US dollar is a popular currency pair for southern hemisphere traders, and as a result many brokerages from Australia offer great pricing on this pair. We found that FP Markets offered the best average spread for the AUDUSD in January, but lets have a look at their spreads during a typical trading day.
Typically throughout the trading day FP Markets, Go Markets, IC Markets & Pepperstone all have very similar spreads, with all of them typically having around a 0.15 pip spread through the trading day. FP Markets takes the win here as they are more competitive during the roll-over period.
The EURUSD is the most popularly traded exchange rate, popular with North American & European commercial traders & traded speculatively around the world. The depth of market on the EURUSD allows brokers to have extremely tight spreads on this pair, however none have managed to have tighter spreads than IC Markets. Averaging a spread of 0.15 pips for the whole month of January, IC Markets hold extremely tight spreads through the trading day, as you can see below – IC Markets’ EURUSD spread can often be found below 0.00 pips.
Again on the GBPUSD, commonly known as the betty or cable, IC Markets hold the lowest average spread for the whole of January 2021. The Cable is popularly traded by commercial traders & speculative traders worldwide, with both the pound and the US dollar being forms of global currency. IC Markets’ GBPUSD spread can often be found below 0.1 pips. Coming in at a close 2nd & 3rd for the month is XM & Tickmill respectively.
The NZDUSD, commonly known as the Kiwi, is a popular pair for Southern Hemisphere traders both commercial and non-commercial. On the NZDUSD GO Markets averaged the lowest spread, with a 0.32 pip average. Below we can see that typically during the trading day Go Markets NZDUSD spread is around 0.15 pips.
The USDCAD, commonly referred to as the Loonie, is a popular pair for North American traders, and is influenced considerably by the US demand for oil. Throughout January GO Markets holds the lowest average spread, at 0.43 pips.
During the Asia session Go Markets holds the lowest USDCAD spread, however during the EU & US trading sessions IC Markets tends to have the lowest spread. During the roll-over period Go Markets again holds the advantage with the lower spread. Typically during the trading day GO Market’s spread fluctuates between 0.1 pips & 0.2 pips.
On the USDCHF, commonly known as the swissie, IC Markets again holds the best spread average for January 2021, with an average of 0.4 pips. Throughout the trading day IC Markets typically holds spread below 0.1 pips, at around 0.7 of a pip.
The USDJPY is a very popular fx pair, typically associated with risk on & risk off flows. On the USDJPY throughout January 2021 a Japanese broker, Goldenway, held the lowest average spread, with an average of 0.145 pips on their standard account! Let’s have a look at a normal trading day.
Throughout the trading day Goldenway appears to fix their spread at 0.1 pips, and their spread stays tight throughout the roll-over.
To summarise how the brokers stack up, TradeProofer found that the best spread for each major symbol was:
AUDUSD – FP Markets
EURUSD – IC Markets
GBPUSD – IC Markets
NZDUSD – Go Markets
USDCAD – Go Markets
USDCHF – IC Markets
USDJPY – Goldenway (Standard Account)