FX Spread Comparison｜Key Points to Avoid When Choosing a Broker

When starting FX (foreign exchange margin trading), the first thing to pay attention to is the spread. Although the spread may seem like a small difference, it has a major impact on profit and loss as the number of trades increases. This is especially important for short-term traders such as scalpers and day traders. 

This article explains the basics of “what is a spread,” compares the spreads offered by various FX brokers, and discusses how to choose the right one. Learn how to avoid losses from spreads by understanding and applying the right knowledge.

What Is a Spread? A Basic Explanation for FX Beginners

A spread refers to the difference between the “buy price (Ask)” and the “sell price (Bid)” when trading currencies in FX. It can essentially be regarded as a transaction fee, and this difference affects profit or loss for every trade. 

For example, let’s assume the USD/JPY rate is as follows: 

• Buy price (Ask): 150.025 JPY

• Sell price (Bid): 150.020 JPY

In this case, the spread is 0.5 sen (= 0.005 JPY). Since traders always start a position with this cost, a narrower spread is more advantageous.

Why Spreads Matter

Here are the reasons why spreads are important in FX trading: 

• Narrower spreads = lower costs
  The more trades you make, the bigger the cost difference becomes. For example, comparing 0.3 sen vs. 1.0 sen per trade results in a difference of 0.7 yen over 100 trades.

• Greater impact on short-term trading
  In day trading and scalping, profits are often accumulated in a few pips, so a wider spread makes it harder to earn profits.

• Spreads vary by trading hours
  During major market hours (London, New York, etc.), spreads are usually narrower, while they tend to widen late at night or early in the morning.

Broker Comparison: Spread List (Major Currency Pairs)

The following table compares the typical spreads offered by major Japanese FX brokers (as of 2025; subject to change): 

*Actual spreads vary depending on market conditions and trading hours. Please check each broker’s official website for the latest information.

Other Key Factors When Comparing Brokers

While brokers with narrow spreads may look appealing, it’s also important to compare and check the following points: 

1. Execution quality (order fill rate) 

Even if spreads are narrow, slippage can prevent trades from being executed as expected. Make sure the broker offers reliable systems and servers. 

2. Stability of spreads 

Some brokers have spreads that fluctuate widely depending on the time of day. Pay attention to spreads widening significantly during economic data releases. 

3. Ease of use of trading tools 

In addition to spread comparison, check the usability of charting tools and order screens. Faster operation reduces stress during trading. 

Recommended Spread Strategies for Beginners 

▷ Choosing Currency Pairs 

Beginners should start with pairs like USD/JPY, which typically have narrow spreads and relatively stable price movements. 

▷ Selecting Brokers by Trading Style 

• For scalpers: prioritize ultra-narrow spreads and fast execution.

• For swing traders: prioritize spread stability even if it’s slightly wider.

Summary: How to Avoid Mistakes in Spread Comparison 

To make consistent profits in FX, it’s essential to understand spreads as an “invisible cost.” When choosing a broker, don’t just focus on numbers; 

• Consider both spread narrowness and stability

• Check execution quality and ease of use of tools

• Ensure compatibility with your trading style

Evaluate brokers comprehensively using all these factors. 

Especially for beginners, remember that “narrower spreads ≠ always best.” Careful broker selection helps prevent mistakes and leads to more stable trading.

✅ Next Steps:

• First, try several FX brokers using a demo account and get a feel for their spreads.

• Before starting live trading, check whether the spread conditions match your trading style — this is the first step toward success.

For more details about spreads, be sure to read our related article as well.