In the last article, we focused on what commissions are waiting for the trader who has decided to take the path of a professional. It was only about the most basic commissions and expenses, and a logical question arises: how to reduce these expenses in Forex? Well, or at least minimize.
Reduce the cost of trading
Each broker has its own unique trading conditions. And the problem of novice traders is that few people read the terms of the offer. In the trading conditions on the site, the broker gives only the information that may be of interest to a person. Pitfalls are registered in the offer. The first way to reduce Forex costs is to read the contract and sum up all the potential costs.
Other ways to minimize costs:
- requotes. These unpleasant satellites of a volatile market are minimized by setting a parameter in MT4 or in the advisor’s settings. By specifying the allowable slippage limit, the trader saves time on confirming the new price due to market volatility;
- spread. The narrower the spread, the better. But transparent ECN brokers openly say that they are forced to cover their costs, therefore, their spreads are not the smallest. A narrow spread may indicate that the broker is a “kitchen” or has hidden fees that it does not advertise. Spread – this is the part of the cost in Forex, which should be treated reasonably, without extra savings and large overpayments;
- swaps. Professional traders alternate intraday and long term strategies. If the short-term strategy for the day brought the desired profit, and the prospects for the long-term are not clear, then it closes. Also, in order to save long-term positions are closed before the weekend. For a cryptocurrency market, swaps turn out to be a stumbling block – to reduce costs, traders prefer to work with exchanges and wallets, where commissions are lower;
- strategies. Scalping is inferior to intraday strategies due to the spread in each position. Hedging is often not profitable due to the spread. If the issue of saving is very acute, work with intraday strategies and use a stop loss;
- taxes. Few brokers are tax agents, but their traders automatically lose part of their profits on taxes. Conclusion: it is better to open an account with a broker who transfers tax issues to an investor. And it’s really a personal matter to pay tax on profits.
All these methods can in one way or another reduce the costs of any broker. And the last recommendation – use the return of the spread. Brokers benefit from involving third-party participants in partner programs: other traders or rebate services. This increases brand awareness and customer loyalty. And let the whole spread be impossible to compensate, even partial compensation will already be pleasant from a psychological point of view. Read more about the terms of the return of the spread on the pages of the FxCash rebate service!