7 Best Forex Brokers for Scalping with Low Spread

To be able to select the best forex brokers for scalping, you must first understand the unique needs of scalping. Let’s begin by defining scalping.

What is scalping ?

Best Forex Brokers for Scalping with Low SpreadsScalping refers to a trading strategy focused on profiting from small price changes. Forex traders who use scalping (scalpers) place multiple trades daily (10 to hundreds). The strategy is inspired by the belief that small forex market movements are easier to determine than large ones. Scalpers target many small profits to compound their gains. They tend to leverage more than normal to boost profits on small movements and rely heavily on technical analysis indicators like MACD, RSI, and candlestick charts to determine entry and exit points. Scalpers also follow a very strict entry/exit strategy to prevent significant losses.

Top Forex Brokers That Allow Scalping Strategy

  • OCTAFX 50% Deposit Bonus, Real contest 1st prize Luxury Car, CopyTrading Feature
    • Online Since 2011
    • Regulated by FSA (Saint Vincent and the Grenadines) and CySEC
    • Spread From 0.4 Pips
    • 5 Digit (5 Decimal Pricing)
    • Leverage Up to 1:500
    • MetaTrader 4 Platform
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  • FBS $100 No-Deposit Bonus, 100% Deposit Bonus, Lucky T-shirt, iPhone 6s Plus
    • Online Since 2009
    • Regulated by CySEC, IFSC (International Financial Services Commision) Belize
    • Spread From 0 Pips
    • 5 Digit (5 Decimal Pricing)
    • Leverage Up to 1:3000
    • MetaTrader 4 & MT5 Platform
    • Free Swap & Commission
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  • XM “50% +20% deposit bonus up to $5,000, Loyalty Program Bonus
    • Online Since 2009
    • Regulated by ASIC, CySEC, FCA (UK), IFSC
    • Spread From 1 Pips
    • 5 Digit (5 Decimal Pricing)
    • Leverage Up to 1:888
    • MetaTrader 4 & MT5 Platform
    • Free Swap & Commission
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  • Exness 35% of the account Deposit
    • Online Since 2008
    • Regulated by CySEC, FCA UK, FSP, BaFin, CRFIN
    • Spread From 0 Pip
    • 5 Digit (5 Decimal Pricing)
    • Leverage Up to 1:2000
    • MetaTrader 4 & MT5 Platform
    • Free Swap & Commission
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Characteristics

Scalping focuses on large position trades for small price movements in the shortest holding time possible. The main goal of scalping is holding a currency pair for the shortest time possible (a few seconds to minutes). In some cases, positions can be held for hours although the strategy requires closing positions before the end of a trading session.

The nature of scalping requires unmatched precision and timing. Although positions can be held for hours, scalpers focus on the one and five-minute candlestick charts for respective currency pairs. They also use indicators such as the RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), Bollinger bands, and pivot points to analyze momentum and price support/resistance levels.

To trade effectively, scalpers must have sizeable account equity (at least $25,000) to avoid violating pattern day trader rules. They buy low, sell high, or buy high, sell low. Since success is highly dependent on speed, scalping must be done via reliable brokers that guarantee quick real-time execution and leverage. Nevertheless, the strategy is still considered high-risk because of the high dependence on leverage.

The strategy is also considered high-risk because it is highly dependent on executions within very short time frames. A late entry, exit or overtrading by seconds can result in high losses. The same applies to over-leveraging and failure to use risk management features like stop-losses. Scalping is also vulnerable to stop loss hunting – a common strategy for forcing scalpers out of their positions by raising or lowering prices to levels where stop-loss orders are triggered.

Scalping results in high commission fees, given a large number of orders are opened and closed on a daily basis. As a result, scalpers stand to benefit from forex brokers that offer better commission pricing structures. Although scalpers need certain attributes to succeed i.e., exceptional discipline to stick to trading strategies, flexibility to take inevitable losses and quick decision-making abilities to execute trades, the broker they choose matters a lot. Given their unique needs, here are useful tips to consider when looking for a great forex broker for scalping.

Tips to choosing the best forex brokers for scalping

  1. Choose a broker with a variety of customizable technical analysis tools

As mentioned above, scalping is a trading strategy that is highly dependent on technical tools. Fundamentals have little to no impact on scalping. When they do, they result in erratic market movements that shouldn’t be ignored. As a result, the forex brokers you choose must offer a variety; if not all the technical tools you need to trade successfully. Scalpers need all the technical indicators available today from MACD and RSI among many others in addition to charting features like candlesticks that show entry and exit positions as well as support and resistance levels clearly.

Since scalpers spend hours gazing at computer screens at a time, it’s also advisable to have tools that are friendly to the eyes. For instance, the technical tools should be customizable i.e., by color, to make them pleasant to look at even after hours of concentration. The broker should also offer tools that allow price monitoring by the second.

  1. Low spread

The best forex brokers for scalping also offer lower spreads. As mentioned above, scalpers open many positions per day, and each position attracts a commission charge in the form of spread. As a result, a high spread on hundreds of transactions a day can result in very high commission charges. Given the small price differences targeted by scalpers and the trading timeframe per trade, the spread is usually the difference between making profits and taking losses.

In typical cases, a currency like EUR/USD will only move up or down by a few pips a minute. With a spread that is high such as three pips per trade, a scalper must wait for movements that cover the spread considering brokers get paid for every position that is opened, even if it is closed at a loss. A high spread usually forces scalpers to wait longer than they would like to exit a trade, which in turn increases risk. Ideally, the best forex brokers for scalping are those that offer a spread of one pip or less for highly volatile currency pairs like the EUR/USD that scalpers target.

  1. Favorable scalping policy

Some forex brokers don’t like scalpers for a variety of reasons, so it’s important to choose a broker that has a favorable scalping policy before you begin trading. Scalping policies cover a variety of issues from how fast orders are executed to if the broker allows trading techniques that favor scalpers.

To understand the importance of scalping policy in-depth, it’s important to understand how brokers work. Supposing most forex traders using the same forex broker are losing money, they shouldn’t lose more money than a broker would be able to settle without incurring a loss. Since forex brokers provide liquidity to their clients on behalf of banks, they need to avoid liquidity crises by initiatives such as trading against their clients. Some brokers open long positions for short positions taken by their clients and vice versa. This results in a ZERO exposure keeping a broker safe whether or not a trader is making money while trading.

However, this practice has a shortfall. It only works for the broker if the client is losing money, not when they are making money. As a result, such a policy might be an incentive for brokers to go to great lengths to ensure their clients lose money. On the contrary, there may be no incentive to want clients to lose money since most forex traders actually lose money. In a nutshell, competent brokers don’t need to use such policies since trading doesn’t constitute a problem.

To understand why some brokers hate scalping, scalpers can disrupt liquidity plans by opening multiple trades at awkward times, forcing the broker to commit their own capital most of the time. Scalpers also bombard trading systems with trades slowing down computing resources like servers in some cases. However, this is usually a problem for brokers using old trading systems. In summary, scalping isn’t a problem for the best forex brokers who are competent, innovative, and invested in the latest trading systems. As a result, they don’t need to use trading policies that disadvantage scalpers. Scalpers should choose no-dealing forex brokers since trades are automated, reducing the risk of internal tampering.

  1. Timely execution, ZERO slippage

All the technical analysis tools in the world, coupled with the lowest spread and best scalping policy, means nothing if the broker doesn’t guarantee timely execution. Since scalpers open trades by the second, you must choose a broker who will give you the exact buying or selling price you select. The system must receive and execute trades instantly offering the correct quotes consistently. There shouldn’t be any time delay between the quoted price and executed price; otherwise, such a broker and system aren’t ideal for scalping.

Misquotes are among the top reasons for losses among scalpers. Let’s not forget the resulting stressing environment they create and the effects of placing high-frequency trades under stress. Scalping is already stressful on its own so the least a broker should do is ensure all trades are executed promptly with zero slippage. Reviews and the trading system in use should give you firsthand information on a broker’s execution capabilities.

  1. 24/7 live customer support

Last but not least, the best forex brokers for scalping offer unmatched customer support. Given the speed at which scalpers place trades, adjust stop-loss orders, execute trades, etc., you should be able to reach your broker instantly. Although the best forex brokers offer a seamless trading experience that is second to none, some issues are inevitable.

In some cases, you may place trades instantaneously as big news events happen, causing sharp price spikes, high spreads, slippage, or execution delays. You may also need to fund your account immediately to continue holding a position but encounter payment delays in the process. In such instances, you should be able to contact your broker within seconds and get the help you need. Email support is too slow for scalpers. A quick response will save you from taking a loss or missing a great opportunity. Ideally, you shouldn’t have to wait more than 5 minutes to get the help you need regardless of where you are located in the world.

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