Depending on your strategy, you may need to seek raw spread forex brokers or raw spread account in order to experience the best trading environment.
Trading fees are some of the more crucial considerations when choosing forex brokers. Market makers and STP brokers may charge marked up spread with fewer commission fees, while ECN brokers implement lower spread plus a certain amount of commission.
While ECN brokers seem to be the standard because they provide lower spreads than other brokers, not all of them offer "pure" spread rates. It is not that they will mark upmarket spread, but they may be working with tier-2 aggregators or any other liquidity providers that stand on the farther end of the chain and offer less competitive rates.
As such, trading in ECN brokers with the best raw spreads may provide the most competitive pricing since they typically establish relations with the deepest liquidity pools.
Here are some ECN brokers with the best raw spreads:
- IC Markets: 0.10 pips on EUR/USD.
- Pepperstone: 0.16 pips average spread for EUR/USD.
- Admiral: Average spread on EUR/USD is 0.10 pips.
- FXTM: Average spread on EUR/USD is just 0.40 pips.
Let's get to the next part to learn further details on each ECN broker above.
1. IC Markets
IC Markets promotes raw spread accounts with fast order execution in an institutional-grade trading environment. IC Market is an ECN broker, considering this broker offers ECN model pricing. This allows them to provide low spreads for their clients.
The average spread for EUR/USD pair is 0.10. Spread for other major pairs averages at 0.20, while cross pairs EUR/GBP and AUD/JPY spreads are around 0.40. Even exotics such as USD/SGD has a 0.30 spread. This broker also has one of the best spreads for gold.
With these rates, the Australian-licensed company is the best raw spread forex broker for day traders, scalpers, and expert advisors. But these rates come with a price. Unlike the forex demo account that is provided for free, IC Markets raw spread account requires a minimum of $200 initial deposit and charges a commission around $3.50 per lot payable per side (may vary for non-USD accounts). The best part, this is also available on their mobile trading apps.
IC Markets is an online forex broker operating under the company of International Capital Markets Pty Ltd. Traders under the Australian jurisdiction are provided with the trading service of IC Markets AU that is headquartered in Australia and licensed by the Australian Securities and Investments Commission (ASIC).
On the other hand, non-Australian traders who open an account in this broker are registered under IC Markets SEY that is based in Seychelles, and regulated under the Seychelles Financial Services Authority (SFSA). The dual operation is a result of the relatively new rules from ASIC that prohibit their regulated broker to offer trading services outside Australia.
Classified as an ECN broker, IC Markets provide clients with MetaTrader 4, MetaTrader 5, cTrader as platform trading options. This broker also follows market trends to include Cryptocurrencies as one of its products, enriching its already wide selection of trading assets that include Currencies, Indices, Metals, Energies, Softs, Stocks, as well as Bonds.
The minimum deposit in IC Markets is in the middle range compared to other ASIC-regulated brokers, as it reaches $200 for every client. Market analysis materials are also prepared regularly for trading insights on IC Markets's official website, proving their competence to serve their traders with important contents created by market experts that work specifically for them.
For payment methods, IC Markets allows funding and withdrawal via wire transfer, credit card, PayPal, Skrill, Neteller, FasaPay, UnionPay, as well as Bitcoin via BitPay. The more interesting aspect from this broker is its multi-base currencies that include USD, AUD, EUR, GBP, SGD, NZD, JPY, CHF, HKD, and CAD.
As the trading technology in IC Markets is highly equipped with co-located servers and extremely low latency (especially on cTrader), the broker is widely known for its capability in hosting traders with the special needs for high-frequency trading as well as scalping.
To sum up, IC Markets is a fitting destination for active traders looking for a well-regulated broker. IC Markets is also flexible in terms of base currency and payment methods, signaling their commitment to welcome traders beyond their home country. As of late 2019, IC Markets provided their website in 18 international languages including English, Korean, Indonesian, French, Spanish, Italian, Malay, German, and Chinese.
Fellow Australian broker, Pepperstone, stands on the ladder's second rung. Pepperstone is not a true ECN broker but can be categorized as an ECN broker considering they have a no-dealing desk policy.
Pepperstone implements a 0.16 average spread for EUR/USD and 0.27 for AUD/USD. The Melbourne-based broker even exceeds IC Markets for average spreads on USD/JPY (it was just 0.16 vs 0.20!). Average spreads for popular cross pairs are still below 1 pip, although spreads for exotics pairs are higher.
Pepperstone charges varying commission fee depending on what is your trading account currency. USD-based and AUD-based accounts will be charged $3.50 per side ($7 per round turn), while EUR-based accounts are only charged EUR2.61 per side (EUR5.23 per round turn).
Pepperstone was founded in 2010 by a team of experienced traders with a shared commitment to improve the world of online trading. Based in Melbourne, Australia, they grew to become one of the largest forex brokers in the world. If traders want to find a broker that provides low spreads, fast execution, and award-winning support, then the answer is Pepperstone.
Pepperstone has a strong legality guarantee because it has been licensed by the Australian regulator ASIC and FCA. Traders' funds can be deposited in segregated accounts at top Australian banks, one of which is the National Australia Bank (NAB). Therefore, the safety of funds is not a concern if a trader chooses to open an account in Pepperstone.
They succeeded in collaborating with 23 top banks to bring Bid to investors instantly via optical fiber. This allows all orders to be executed 100 percent automatically with low latency up to 0.05 milliseconds, without dealing desk intervention and requotes, as well as with super low trading costs.
Trusted by over 73,000 traders around the world, Pepperstone processes an average of USD12.55 billion of trading volumes every day. Because of that, they have many awards such as:
- The Best Global Forex ECN Broker 2019 and Best Forex Trading Support-Europe
- Best Australian Broker and Best Trading Platform 2018 by Compareforexbrokers.com
- Best Forex ECN Broker, Best Forex Trading Support, and Best Forex Trading Conditions by UK Forex Awards 2018
With the many rewards gained, Pepperstone hopes to attract more and more traders from all over the world. The rising performance of Pepperstone is not only due to the super-tight spreads and fast execution that it provides, but also because many traders are interested in trading with deposits in currencies other than US Dollars.
For this reason, Pepperstone is one of the most market-responsive brokers because it is willing to accept deposits in 10 currencies, which include AUD, USD, EUR, CAD, GBP, CHF, JPY, NZD, SGD, and HKD.
Trading in Pepperstone would allow traders to choose between 11 trading platforms: MT4 for desktop, MT4 Mac, MT4 iPhone, MT4 Android, MT4 iPad/Tablet, MT5, WebTrader, cTrader WebTrader, cTrader cAlgo, and cTrader Mobile. The choice of trading platforms may seem confusing to novice traders, but actually, it is very useful because it has fast execution.
When trading forex, traders can enjoy raw spreads from 0.0 pips on Razor accounts, over 61 currency pairs, and commission-free account funding on a wide range of deposit options. In addition to currency pairs, Pepperstone provides many types of trading instruments, including CFDs for indices and shares, commodities, and cryptocurrencies.
Instruments in commodity trading are pretty much diversified. Not only metal, gold, and silver, but traders can also trade with soft commodities such as cotton, sugar, coffee, cocoa, and orange juice. Pepperstone also provides trading on energy (oil and gas).
There are two types of accounts provided by Pepperstone, namely Razor accounts, and Standard accounts. If you area beginner, it is recommended to choose a Standard account with an average EUR/USD spread of 1.0-1.3 pips and free commission.
Those with particular trading styles such as scalpers and algorithmic traders may enjoy the lower cost setup traditionally seen in a Razor account, with a commission from AUD7 round turn of 100k traded. You can start trading with a minimum lot of 0.01 (micro) and 1:400 leverage.
As a Pepperstone client, a trader can fund and withdraw with alternative methods including Visa, Mastercard, POLi internet banking, bank transfer, BPay, PayPal, Neteller, Skrill, and Union Pay.
If you are new to trading or looking to practice your trading strategies in a risk-free environment, you can create Demo Account in Pepperstone. But if you are an experienced trader or prefer to learn by doing, Pepperstone provides a Live Account that allows you to trade with live executions and pricing.
Traders can also follow and copy strategies from popular traders using third-party services while learning how to improve their trading abilities. Pepperstone has partnered with a range of social trading platforms that traders can choose from, such as Myfxbook, ZuluTrade, Mirror Trader, MetaTrader signals, and Duplitrade.
Founded in 2001, Admirals provides low-cost trading through Metatrader4 and Metatrader5. While there are no ECN accounts, Admirals is considered an ECN broker since they can execute transactions directly to the international financial market.
The average spread for EUR/USD is 0.10, but it shoots up for other pairs. AUD/USD has a 0.50 spread, while crosses such as AUD/JPY has a 1.10 spread.
Particularly notable, Admirals has comparatively lower commission fees at $3.00 per side ($6.00 per round turn) for USD-based accounts. Owners of GBP and EUR-based accounts may even enjoy cheaper fees at GBP2.00 and EUR2.00 each.
If you are looking for a raw sspread forex broker that also offers high leverage, then FXTM is your best bet. FXTM uses the ECN/STP model, providing traders direct access to liquidity providers and the interbank market.
The average spread on EUR/USD is just 0.40 pips, while AUD/USD is 0.70. The cross-pairs spread usually a little above 1.00. It was just exotic pairs' average spread that is quite expensive, as much as 3.00 for USD/SGD.
The Cyprus-based broker has fixed commission fees at $4.00 per side ($8.00 per round turn) for all accounts. This is quite cheap if you seek higher leverage. FXTM's maximum leverage is between 1:25 and 1:1000 for cent accounts and up to 1:200 for standard accounts.
FXTM was initially launched in 2011 with a unique vision to provide unparalleled superior trading conditions. Opening an account in FXTM would also bring about access to advanced education and sophisticated trading tools in the forex industry.
Now, FXTM is registered under the Financial Conduct Authority of the UK with the number 600475. The company is also regulated by the Cyprus Securities and Exchange Commission with CIF license number 185/12, and is licensed by the Financial Sector Conduct Authority (FSCA) of South Africa, with FSP No. 46614
FXTM has 1 million registered accounts with more traders joining every day. The company continually tries to improve their performance and have got many awards such as Best Trading Experience 2019 by World Finance Awards, Best Online Forex Trading Company Nigeria 2018 by International Finance Awards, Reputable Investor Education Forex Broker Award 2018 by Hexun.com, Forex Brand Of The Year China 2018 by Fxeye.Com, and many more.
As a responsible broker, they determine leverage (expressed as a ratio of transaction size relative to trader's buying power) according to the trader's level of knowledge and experience in trading, which is evaluated by the Appropriateness Assessment. The company also enables trading with leverage up to 1:1000.
As for spreads, FXTM offers low spreads starting from 0.1 pip, so traders can withdraw profits at the start of trading. The company, which has headquarters in several countries, uses No Dealing Desk (NDD) technology and partners with credible liquidity providers to provide the best bid and ask prices.
For beginners, there is an automatic trading facility called algorithmic trading provided. When trading in FXTM, traders can develop their trading strategy or adopt other traders' strategies. Furthermore, the strategy is applied to automated trading systems, such as Expert Advisors. The purpose of this system is traders do not have to worry about losing opportunities while not observing the market so that profits can still be earned.
Three types of ECN accounts use the MT4 and MT5 trading platforms. There are also mobile and Tablet Apps trading platforms. Aside of providing many account variants, FXTM goes above and beyond to ensure that their client receives excellent support that they deserve, making their trading experience optimal and user-friendly.
FXTM also provides a diverse range of products. In addition to over 50 currency pairs, they provide gold, silver, CFD on commodity futures (oil), CFD on ETFs, and indices.
Education about the basic concepts of the forex industry is also accessible in this broker. Traders can read all the concepts provided in the form of e-books, video tutorials, articles, webinars, and forex seminars. There are 17 languages provided on the FXTM website to make it easier for traders to learn about forex.
Traders are also given various choices for payment methods, including Credit Cards (Visa, Mastercard, Maestro) and E-Wallet (Neteller, Skrill, Western Union). For withdrawing funds, traders are not charged a fee with a length of 2 hours to 2 days. Traders can live chat to ask further questions and contact the admin via email. There is also a question and answer page about forex trading on FXTM.
How to Check Brokers' Spreads the Right Way
There's an element of marketing when certain brokers label themselves "ECN brokers". Usually, the ads are accompanied by exaggerated claims such as "spread as low as zero" or "spread starting from 0.1" and so on. Traders then regret signing up with them because actual spreads are far higher.
To avoid such a problem, it is important to note that you should check "average spreads" rather than "lowest spreads". The average spread is the true spread measurement across brokers, while the lowest spread is merely icing on the cake. This is also the key to how experienced scalpers choose their brokers.
You could also compare each broker's spread to comprehend which one actually serves the most competitive spreads. As for the brokers above, here is the comparison table:
|Brokers||Average Spreads on EUR/USD|
The choice is yours. Just check up on their terms and conditions before you sign up for any accounts. If you want to try comparing other brokers not mentioned in the table, feel free to use the forex broker comparison tool.