The difference between the various buying and selling prices for any currency pair is called the spread. Making up the spread is necessary for any trade to become profitable. Lower spreads result in reaching the positive column earlier. In general, Forex Brokers advertise the fact that they have low spreads as an advantage to the traders.
When there is a high supply & demand and the market conditions seem optimal, a fixed spread might seem like a perfect option. The truth is that a fixed spread might not always reflect the true buying and selling rates.
In fact, fixed spreads do not offer any advantages and depend on broker’s tactics such as widening. Widening is a tactic where Forex brokers with dealing desks manipulate the spreads on offers to their clients when client trades move against the broker.
CMX Markets has an ECN/STP trading model that does not have a fixed spread. Because it does not have a fixed spread the offers actually reflect the true buying and selling rates. This guarantees the investors that they are trading under real market conditions of supply and demand.
The ECN/STP model offers our clients direct access to other Forex Market participants, both retail and institutional. We do not trade against our own clients, so there is no conflict of interest. This gives our clients more advantages than dealing desk market makers. Advantages such as:
- Very tight spreads
- Better rates
- No conflict of interests between CMX Markets and its clients
- No limits on Scalping
- No “stop-loss hunting”
Due to the fact we have strong relationships with the best liquidity providers in the market, we are able to provide our clients with the most competitive rates and spreads possible. Our clients enter the Forex Market on the same terms as the Majors.
The Markets Aggregation Engine combines all the best Bid and Ask prices directly from all the top liquidity providers. Then a selection will be made of the best offers and these are streamed to our clients.