Although fixed exchange rates exist only in a few brokers, they are a practical feature for any trader。Here are the benefits of using a broker to fix the exchange rate。

Before opening a trading position, the trader must register with the broker, open a trading account and deposit some funds。While not necessarily affecting the outcome of the transaction itself, the process of depositing and withdrawing money should not be underestimated。In fact, this should be one of your top considerations when choosing a forex broker。

As two basic functions provided by brokers, deposits and withdrawals can be used as early indicators to determine the broker's commitment to supporting customers。

Excellent deposit and withdrawal features from almost all leading forex brokers。Often, good forex brokers offer a variety of payment methods, from the most traditional options such as wire transfers to more advanced options such as electronic payments。Not only that, the process of deposit and withdrawal itself should be simple and without complex requirements。

To further achieve a good deposit and withdrawal experience, some brokers offer a fixed exchange rate feature。How does it affect foreign exchange trading?？

To answer this question, here is a list of 3 benefits of the Forex Broker Fixed Rate feature:

1. Simplify deposit and withdrawal calculations
   High flexibility
   Minimize spread risk in trading

But is it more profitable?？Let's refer to the answer below。

Advantages of fixed exchange rates

The fixed exchange rate of a forex broker is one of the additional functions, which basically refers to the deposit and withdrawal exchange rate set at a certain level。Simply put, the currency exchange rate is always the same (fixed) when making deposits and withdrawals.。Here are the benefits of a fixed exchange rate:

1.simpler deposit and withdrawal calculation

Usually, traders must use exchange rates when depositing or withdrawing funds。Most forex brokers will require traders to deposit or withdraw money in USD as USD is currently the most stable and standard currency。Therefore, traders who do not use US dollars must use the exchange rate and calculate the amount required for the transaction。

Since the currency exchange rate itself is constantly changing, the deposit amount will not always be the same。

For example, the AUD / USD exchange rate is 1.36, If you want to deposit 100 Australian dollars in your trading account, it will cost 136 US dollars。Other times, the dollar may fall to 1.38。Since you also need to deposit 100 Australian dollars, you can only deposit 138 US dollars。This situation can be difficult for traders as they have to calculate the exact amount required before making a deposit and decide when is the best time to deposit。

However, the use of fixed exchange rates does not encounter such problems。With this feature, the broker will determine the standard exchange rate for deposits and withdrawals。Assuming the standard exchange rate is set to 1 per 1 Australian dollar.$35, which means that the exchange rate remains constant whenever funds are deposited。If you want to deposit 100 Australian dollars, you need 135 dollars, regardless of the actual exchange rate at the time。

The same concept applies to the withdrawal process。If the broker does not use a fixed exchange rate, the withdrawal amount will fluctuate based on the current exchange rate。Therefore, you must calculate the final result from time to time。When the exchange rate is unfavorable to you, the profit you earn cannot be fully realized; on the other hand, the fixed exchange rate allows you to withdraw funds at the same exchange rate at any time, and the withdrawal amount will no longer be affected by market fluctuations。

2.Provides flexibility

Just because the exchange rate used by the broker is always the same, does not mean that it will limit your movements and reduce the flexibility of Forex trading。On the contrary, a fixed exchange rate actually provides greater flexibility because you can deposit and withdraw money at any time without worrying about changes in currency exchange rates。

Profits and losses are crucial for most forex traders。As a result, they are usually very precise in calculating the profit or loss on a trade。This also means paying great attention to the exchange rate dynamics of the currency used, whether the currency appreciates or depreciates at the time of deposit or withdrawal.。Thus, time barriers limit decision making in forex trading。

Imagine that when the currency depreciates significantly at the time, your trading account does require additional deposits。You may have to hold it off until the value of the currency picks up again。The same dilemma occurs when the currency is strong, but you need to withdraw funds。Even if cash is indeed needed, it may eventually be delayed。

Whether you realize it or not, fluctuations in currency exchange rates can greatly affect forex trading freedom。This does not usually bother many traders as most are used to standard trading systems rather than fixed exchange rates。But now some brokers can choose to use a fixed exchange rate, making deposits and withdrawals easier than before。You can deposit or withdraw money at any time without any restrictions and concerns。

3, eliminate the risk of trading spreads.

The difference in the exchange rate will automatically produce a spread.。Remember, this is not the same as Forex trading spreads。Foreign exchange spreads are the difference between the bid and ask prices, while deposit and withdrawal spreads are the difference between the deposit and withdrawal rates.。

Assume that the deposit exchange rate of USD / AUD is AUD1.33, the withdrawal rate is AUD1.38, you will automatically pay AUD0 for each deposit and withdrawal.05 the difference, multiplied by the amount you use。If your deposit is $100, then you need to pay a $5 spread。

The situation will be different for fixed-rate brokers because the deposit and withdrawal rates are always the same, so there is no need to pay the spread。For example, if the broker determines that the exchange rate is 1 per $1.35 Australian dollars, the remittance will be used for deposits and withdrawals.

Brokers offering fixed exchange rates

However, there are not many brokers offering fixed exchange rates to their clients。Because this may not be so beneficial to brokers, they must take higher risks when the exchange rate is unstable, thereby increasing the chance that the broker will go bankrupt by making up for the trader's exchange rate loss。

Nevertheless, some brokers still offer fixed exchange rates based on the principle of attracting new clients:

1. InstaForex

InstaForex has been known for its lax trading conditions since its inception。In fact, it was one of the first brokers to offer fixed spread accounts around 3-7 points, so you don't have to worry about uncontrollable high spreads when the market is extremely volatile during news releases。

2. FBS

FBS began operations in 2009 and has since added a fixed spread function from 3 o'clock。Unlike InstaForex, which offers a fixed spread for both types of accounts, FBS activates this feature only on its micro accounts。

3. FirewoodFX

FirewoodFX also provides a fixed exchange rate function in all accounts, which is beneficial for news traders because they need to protect their rights and interests when the market is unstable during news releases。The minimum deposit for micro and standard accounts is $10, with a fixed spread of 3 and 2 points, respectively.。

Conclusion

Although it may seem simple, the exchange rate of deposits and withdrawals can have a huge impact on your trading experience。If you are the kind of trader who likes frequent deposits and withdrawals, you must carefully consider the best time to deposit and withdraw money to get the best possible exchange rate。

But with a fixed exchange rate broker, you will no longer encounter such problems, because the exchange rate for deposits and withdrawals is always the same。You can request a transfer at any time without worrying about exchange rates and extra charges。But only a few brokers actually offer fixed rates, so be sure to double check。