OctaFX, a forex and CFD broker, said that it has made fixed spreads trading possible for Micro accounts that are USD denominated on MetaTrader 4 platform. There are advantages and disadvantages to fixed spreads trading and they are dependent on what type of trader you are and the strategy you employ for your portfolio.

The biggest advantage of fixed spreads trading is the pre-decided fee per transaction. This does not change depending on the liquidity levels or market conditions. Further, you can easily determine the trends and specific levels from the charts, based on your strategy, for both entering into and closing down your positions.

On the other hand, the chances of you paying a lower fee are higher when you trade with floating spreads. The fee is generally lower as spreads become narrower during periods of high liquidity. However, there is a possibility of trades getting negatively influenced as the spread may be widened for reflecting changes in the market conditions. This could happen even if you have already opened a position. This leads to a not-so-appealing closing price.

It is because of this that fixed spreads trading is recommended if you are a long-term trader so that market conditions do not change the fee you pay on the trades. Short-term traders can also benefit from fixed spreads trading at certain times. In fact, it is the ability to easily calculate the entry and exit points of a position that enables you to make a strategic assessment if you opt for short-term trading. This includes scalpers as the trading volume turnover is very high in their case.

What OctaFX has announced is that if you do not have a U.S. dollar-denominated micro account as of now, you can open another account and trade using the MetaTrader 4 platform. OctaFX’s decision to enable fixed spreads trading on MT4 is for micro account holders is interesting because more and more forex traders are adopting the upgraded platform MT5 after Metaquotes said that they are stopping the sales and service of MT4 software.

OctaFX has already started offering access to the MetaTrader 5 forex trading platform. Therefore, it is possible that they will offer fixed spreads trading on other platforms as well at a later date. This is nothing but speculation because the forex broker has not made any announcements as regards their future plans in this regard.

Additionally, OctaFX has enabled cryptocurrency CFDs trading in view of the increased demand for digital currencies around the world. This further diversifies options for their clients.