Commissions and spreads are the two primary trading costs Forex traders should evaluate. Forex traders who keep positions open overnight, especially leveraged ones, must also consider swap rates, one of the most overlooked fees.
While it appears as a low-cost offer, at first sight, most commission-free pricing environments have higher overall trading costs compared to the best Forex brokers with low commission rates.
Read on to view my shortlist of the best low commission Forex brokers below, followed by an explanation of their associated account types and other issues, and an explanation as to how to choose the best low commission Forex broker for you.
Best Low Commission Brokers Comparison
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Regulators | ASIC, BVI, Central Bank of Ireland, FFAJ, FSCA, KNF, MiFID | CMA, CySEC, FCA, FSC Mauritius, FSCA | ASIC, CySEC, FSCA | FMA, FSA | ASIC, CySEC, FCA, SCB |
Year Established | 2006 | 2011 | 2005 | 2014 | 2009 |
Execution Type(s) | Market Maker | ECN/STP, Market Maker | ECN/STP | ECN/STP, No Dealing Desk | ECN/STP, Market Maker |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 0.9 pips | 0.1 pips | 1.1 pips | 1.3 pips | 1.0 pips |
Average Trading Cost GBP/USD | 1.5 pips | 0.2 pips | 1.4 pips | 2.0 pips | 1.2 pips |
Average Trading Cost Gold | $0.29 | $0.18 | $0.21 | $0.90 | $0.12 |
Trading Platform(s) | Other, MetaTrader 4, MetaTrader 5, Web-based+ | MetaTrader 4, MetaTrader 5, Proprietary platform | MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Web-based | MetaTrader 4, MetaTrader 5, Trading View | MetaTrader 4, MetaTrader 5, Trading View |
Islamic Account | |||||
Negative Balance Protection | |||||
| Visit Website | Visit Website | Visit Website | Visit Website | Visit Website |
AvaTrade
In Summary Highly regulated, choice of fixed or floating spreadsAvaTrade is one of the largest Forex / CFD brokers and well-known for offering their clients a choice of fixed or floating spreads. They have a very high and strong level of regulation. AvaTrade is directly regulated in Ireland (and by extension, the European Union), Australia, Japan, South Africa, and the British Virgin Islands. Outside the European Union, Ava offers maximum leverage on Forex currency pairs as high as 400 to 1. AvaTrade offers trading in over 55 different Forex currency pairs, 17 commodities, 20 equity indices, 14 cryptocurrencies, plus 66 individual stocks and shares. 2 bonds and 6 ETFs are also on the menu.
Pros & Cons
- High-quality educational offering via SharpTrader
- Excellent choice of trading platforms catering to various trading needs
- Broad asset selection and cross-asset diversification opportunities
- Well-regulated and trusted broker with oversight from a central bank
- Trading costs competitive but nothing special
FXTM
In Summary Best all-around broker with high floating leverage and fast executionFXTM remains one of the best-priced Forex brokers industry-wide. The commission between $0.80 and $4.00 per round lot, dependent on monthly trading volume, ranks among the cheapest industry-wide, especially for high frequency and high-volume traders. The contract specifications list a minimum spread of 0.1 pips, available on five currency pairs, confirming broad-based liquidity. FXTM fixes MT5 commissions at $4.00 per lot, but they remain flexible based on volume in MT4.
The minimum deposit is $500 to get access to the FXTM Advantage account, but traders with a $25,000 portfolio qualify for commission-free trading and raw spreads of 0 pips. The FXTM dynamic leverage consists of six tiers. The minimum is 1:25 for trades with a notional value of $8M+, and the maximum is 1:2000 for transactions up to $50,000.
Pros & Cons
- Excellent commission-based Forex pricing environment and transparency
- Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
- Quality market research and educational content for beginner traders
- A highly regulated broker with a tier-1 license
- No cryptocurrencies and limited choice of commodities
FP Markets
In Summary ECN trading with leverage up to 1:500FP Markets charges $6.00 per 1 round lot for raw spreads of 0 pips, and its minimum deposit is only $100. This places FP Markets among the best Forex brokers with the lowest capital requirements for access to low-cost commission pricing structures. FP Markets list minimum spreads of 0 pips on 35 currency pairs, but average one tick higher, with the EUR/USD and the USD/JPY at 0.1 pips, while the rest clocks in above that. Traders also get maximum leverage of 1:500 and order execution of 40 milliseconds, ideal for scalpers and high-frequency traders.
Adding to the advantages at FP Markets are upgraded MT4/MT5 trading platforms with twelve plugins and VPS hosting. Manual traders can rely on third-party services from Autochartist, while MAM/PAMM accounts support retail account management. FP Markets also developed its proprietary FP Markets Copy Trading, available alongside Myfxbook Autotrade and the embedded MT4/MT5 copy trading service.
Pros & Cons
- Choice of trading platforms and auxiliary trading tools
- Very competitive cost structure and excellent asset selection
- Low minimum deposit requirement and leverage of up to 1:500
- Well-regulated and trustworthy
- Availability of Iress geographically restricted
BlackBull Markets
In Summary Best ECN trading environment, with scalping and hedgingBlackBull Markets was founded in 2014 in New Zealand. Like many antipodean Forex brokers, BlackBull Markets is an ECN broker, offering raw spreads and commissions. They are regulated in New Zealand by the Financial Services Providers Register (FSPR) and offer a maximum leverage on some Forex currency pairs as high as 500 to 1. In addition to their global headquarters in New Zealand, BlackBull Markets also has presences in the form of branch offices in New York and Malaysia. BlackBull Markets offers a relatively tight range of tradable assets: 27 Forex currency pairs and crosses, gold, silver, crude oil, natural gas, and 6 major equity indices. That should be sufficient for those traders with more focused strategies not requiring wide diversification.
Pros & Cons
- ECN/NDD execution model with deep liquidity
- Institution-grade pricing for retail traders via proprietary price aggregation
- ZuluTrade and Myfxbook for social trading
- Leverage of up to 1:500
- Limited deposit options
Eightcap
In Summary Competitive pricing + excellent daily videosCommission-based cost structures usually offer lower trading fees versus commission-free alternatives contrary to widespread belief. Eightcap belongs to the cheaper Forex brokers with US Dollar commissions of $7.00 per 1.0 standard round lot. Euro commissions are €5.50, and British Pound commissions £4.50, ensuring Forex traders at Eightcap get ultra-low trading fees, particularly considering the low spreads, which commence from 0.0 pips in all major currency pairs.
Eightcap established itself as one of the most competitive low-commission Forex brokers, where Euro and British Pound base accounts benefit the most. It makes Eightcap ideal for demanding algorithmic traders, scalpers, high-volume traders, and hedgers.
Pros & Cons
- Low minimum deposit and high leverage of up to 1:500
- Competitive cost structure
- Excellent technology infrastructure and seasoned management team
- Daily research and quality educational content
- Limited leverage in some areas
What is Commission in Forex and How Does it Work?
Forex commissions are the fees involved in trading separate to the profit and loss associated to the position a trader opens and closes, this cost of trading will apply regardless of the outcome. Forex commissions typically are based on the trading volume, many competitive brokers also offer volume-based rebate programs, this is great for high volume strategies and can make a difference to profit &loss. The trading platform will automatically calculate Forex commissions and often lists them in a separate column for complete transparency, usually next to overnight swap rates, depending on the instruments traded and the time a position is held for, this can be another significant trading cost traders must consider.
What is Commission Per Lot in Forex?
A ‘lot’ is an MT4/5 measure of Forex trading volume (other platforms have adopted this measure too), where 1.0 ‘standard lot’ equals 100,000 of the base currency unit, e.g., 100k Euro when trading EURUSD. Forex brokers list commissions on a lot basis. For example, a commission of $6.00 per 1.0 round lot means that if a trader places a 1.0 lot order, a $6.00 commission applies: $3.00 when entering the trade and $3.00 when exiting. Trading 0.01 lots, or a micro-lot, often the minimum trading volume, will cost $0.06. Depending on the broker and the trading platform, the commission applies on each transaction, entry, and exit or only at the trade entry (this is standard practice in MT4/5).
How is Commission in Forex Calculated?
The trading platforms of low-commission Forex brokers automatically calculate commissions based on the transaction size. Forex commissions are a fixed cost, displayed per 1.0 standard lot. Traders should pay attention to how the Forex broker displays its commissions. A commission of $3.00 per side (or half turn) means the total commission costs are $6.00, $3.00 when entering a 1.0 lot trade, and $3.00 when exiting. A commission of $6.00 per round lot (full turn - to open and close a position) means the cost is the same, therefore traders should not confuse a $3.00 per side commission as cheaper than a $6.00 per round lot commission.
Differences Between Commission and Spread
Commissions based on volume and bid/offer spreads are the main trading fees. The former depends on the Forex broker and remains a fixed cost that is easy to compare. Low-commission Forex brokers usually grant traders access to ‘raw’ or no markup to interbank spreads, starting from 0.0 pips, typical EUR/USD spreads on raw accounts are between 0.1 pips to 0.2 pips. Competitive commissions range between $4.00 and $7.00 per 1.0 standard round lot. Volume-based rebate programs can further reduce commissions to below $1.00 per lot.
Zero commission brokers add their own markup on raw market spreads, compensating for the lack of commission. For example, if the spread for the EUR/USD is 0.1 pips on the interbank market, a zero-commission broker might add 0.8 pips, which translates to $8.00 per 1.0 standard lot and offer traders a spread of 0.9 pips.
Competitive zero-commission brokers match the fees levied by low-commission Forex brokers. For example, the industry-standard commission is $6.00 per lot, or 0.6 pips, the minimum spread at well-priced zero-commission brokers. Generally, low-commission Forex brokers maintain a pricing advantage over zero-commission brokers as they offer spreads which are not marked up, therefore the actual trading cost is more transparent.
Forex Commission vs. Spread Pricing Models H2
Commission-based pricing models are usually cheaper than commission-free or spread-based alternatives. Traders have choices and do not have to pay commissions, as many brokers offer zero-commission pricing. Traders should focus on the total cost of trading rather than get fixated on commissions versus zero commissions.
Forex commissions example:
- EUR/USD raw spreads of 0.0 pips
- Forex commissions of $6.00
- Internal markup of 0.0 pips
- Total trading fees of $6.00
Spread-based example:
- EUR/USD raw spreads of 0.0 pips
- Forex commissions of $0.00
- Internal markup of 0.6 pips
- Total trading fees of $6.00
The trading fees in both examples are identical, but most low-commission Forex brokers have volume-based rebate programs, while zero-commission brokers add higher internal markups that can fluctuate, making them potentially more expensive when taken into overall consideration.
Pros & Cons of Zero/ Low Commission Forex Brokers
Below are the pros and cons of low-commission forex brokers and zero-commission alternatives.
The pros of low-commission Forex brokers are:
- Access to ‘raw’ interbank market spreads
- Volume-based rebate programs
- More cost control & transparency
- Lower trading fees, including cheaper swap rate mark-ups on leveraged overnight positions.
The cons of low-commission Forex brokers are:
- Some require higher minimum deposits.
The pros of zero-commission brokers are:
- Lower account minimums
- Ideal for low-volume and casual traders
The cons of zero-commission brokers are:
- Market interference by brokers to the spread
- Higher trading costs, including higher swap rates on leveraged overnight positions.
- Most lack volume-based rebate programs.
- Misleading marketing campaigns and hidden fees
Bottom Line
Traders should focus on the total cost of trading and ignore the commission versus no commission debate. Most commission-based brokers offer lower trading fees than commission-free providers. Many brokers advertise low minimum spreads, while average ones are notably higher. Therefore, traders must read and understand the fine print concerning trading fees.
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