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 consideration 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. Depending on your strategy, you may also need to specifically seek raw spread forex brokers in order to experience the best trading environment.
Some traders think that ECN brokers are the way to go because they provide lower spreads than other types of brokers. But actually, not all ECN brokers offer "pure" spread rates. It is not that they will mark up market 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. Comparatively, raw spread forex brokers seek to provide the best quotes by establishing relations with the deepest liquidity pools.
See also: Forex Broker Cheats: What are They and How to Anticipate Them
There's also an element of marketing when certain brokers choose to label themselves as "ECN brokers". Usually, the ads are accompanied with 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. You should compare the spread from each broker to see which one is the best for you.
It is important to note that we should check "average spreads" rather than "lowest spread". 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.
Now, the question is, how do we check average rates from dozens of ECN brokers? How much time do we need to research it? Well, fortunately for you, we are here to provide the result of the latest average spread comparison among leading forex brokers. The data does not only research raw spread forex brokers but also common STP/ECN brokers and market makers.
1. IC Markets
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.
IC Markets promotes raw spread account with fast order execution in an institutional-grade trading environment. 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).
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.
Fellow Australian broker, Pepperstone, stands on the second rung of the ladder. 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 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).
IG Markets is an online trading provider with decades of experience in the financial market. Founded in 1974, the world-leading company has gathered more than 178,000 clients worldwide with over 16,000 markets reached as of 2019. IG Markets is authorized and regulated by the Australian Securities and Investment Commission (ASIC). It is also important to note that being established in 1974 makes IG Markets one of the forefront online CFD brokers. Their service has expanded to 15 countries across five continents.
Aside from famous for its reliable experience, IG Markets is also known for its truly broad range of trading instruments. In fact, the broker has long been regarded as one of the most accomplished companies in offering the most trading assets to clients. The wide choice of instruments includes forex pairs, 26 indices, over 12,000 shares, hard and soft commodities, cryptocurrencies, as well as other markets such as bonds, rates, and options.
Forex trading in IG Markets is provided in two ways: CFD and DMA (Direct). Here are the conditions for each type of trading:
- Minimum spread: 0.6 pips
- Commission: None
- Platforms: Web, mobile apps, MT4, ProRealTime, L2 Dealer, terminals and APIs
- Trading size: Contracts
- Demo account: Yes
- Minimum spread: No details
- Commission: from $10 per $1 million traded
- Platforms: Web, mobiles apps, L2 Dealer, terminals, and APIs
- Trading size: Lots
- Demo account: No
Both ways of trading are available for all clients. However, DMA does not enable trading in MetaTrader 4. Clients are also not allowed to trade in a demo account for virtual trading. It is essentially a type of trading reserved for experienced traders with high necessity for the best pricing in the market, as DMA offers market depth from a range of exchanges (including full market depth from the LSE).
Trading platforms in IG Markets are accessible via web, mobile app, and desktop. They are offered with 2 main varieties: Core Platforms and Specialist Platforms. The core platform is meant for all types of trading with the add-ons of DMA, ProRealTime access, and Forex Direct. Meanwhile, Specialist Platforms consist of L2 Dealer, ProRealTime, and MetaTrader 4.
The first two platforms charge fees that include minimum $2000 balance and monthly fees for shares data and level 2 prices (for L2 Dealer), as well as platform fees amounting to $40 per month and monthly fee for shares data (for ProRealTime).
IG Markets does not require a minimum balance to open an account. It also provides a swap-free account that frees clients for any interest, rollover, or swap charges on overnight positions. Yet, All costs and charges are built into the spread. This account suits well with long-term traders who need to keep their positions open for days or even weeks.
For beginners, IG Markets builds an IG Academy that gives interactive education and online trading courses. This way, clients can get a grip on the financial markets with the essentials of trading provided in infographics, video explainers, and end-of-course quizzes. Even better, the IG Academy is already integrated into its mobile app so clients can always learn about financial markets in much more efficient ways.
In conclusion, IG Markets is a client-friendly broker with more than 40 years of experience to back up its credibility. Their efforts and commitments to provide the best varieties of trading platforms are proven in the unique Core and Specialist Platforms.
Traders with little experience can apply to Forex CFD account in either Core Platforms or MetaTrader 4, while professionals can achieve the best experience in the financial market with IG Market's DMA trading and L2 Dealer or ProRealTime platforms.
Currently, IG is the largest retail forex broker in the world. Their market shares flew off the roof following several notable acquisitions in North America, including DailyFX. As it is, IG probably provides one of the largest liquidity pool access for retail traders. The company operates under the "market maker" banner but refers to market data from tier-1 liquidity providers such as Bank of America, Barclays, Citibank, Goldman Sachs, JP Morgan, Morgan Stanley, and UBS.
The average spread on EUR/USD is just 0.86. Spreads for AUD/USD and other major pairs are higher than 1.00, while spreads for cross pairs range around 1.80-2.50. Interestingly, IG didn't promote such low rates on a specific raw spread account. Any trader who signs up with their standard account can enjoy these rates. But these come with expensive commission fees as much as $6 per lot payable per side.
4. Admiral Markets
Founded in 2001, Admiral Markets provides low-cost trading through Metatrader4 and Metatrader5. 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, Admiral Markets has comparatively lower commission fees at $3.00 per side ($6.00 per round turn) for USD-based account. Owners of GBP and EUR-based accounts may even enjoy cheaper fees at GBP2.00 and EUR2.00 each.
>>> See Admiral Markets Review
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.
If you are looking for a low spread forex broker that offers high leverage as well, then FXTM is your best bet. The average spread on EUR/USD is just 0.40, while AUD/USD is 0.70. Cross pairs spread usually are 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 account, and up to 1:200 for standard accounts.
So, which one will you choose? Here is the side by side comparison between three of the five brokers above:
|❗Information||Testimonials (549), News (61), Promotions (1), Webinars (281)||Testimonials (20), News (33), Promotions (3)|
|💲 Min Deposit||$200||$1|
|⚖ Max Leverage||1:500||1:50|
|💡 Min Position||0.01 lot||0.01 lot|
|💳 Payment||Crypto, BPAY, Credit/debit cards, FasaPay, Neteller, PayPal, Skrill, UnionPay and Wire transfer||Wire transfer and Credit/debit cards|
|🧩 Demo Account|
|📁 Segregated Account|
|🕋 Islamic Account|
|👨💻 PAMM Account|
|📈 Managed Account|
|🇺🇸 US traders|
|🏆 Trading contests|
|⚡ Automated trading|
|💰 Bonus offers|
|📖 Free education|
|1️⃣ One-click trading|
|⏱ Trailing stop|
|⏳ Pending orders|
|Gold & Silver|
|🗣 Website Languages||Arabic, Chinese, English, German, Indonesian, Japanese, Korean, Malay, Portuguese, Russian, Spanish||German, English, Spanish, French, Italian, Japanese, Portuguese, Swedish, Chinese|
|🚪 Trade Now||Open IC Markets||Open IG|
The choice is yours. Just make sure to check up on their terms and conditions before you sign up for any accounts. If you want to try comparing the other two brokers not mentioned on the comparison table, feel free to make use of the forex broker comparison tool.
Feb 10 2023
Something is confusing in my head. Why in forex are people discussing trading terms, spreads, pips, lots and many other things, even a few comments on these sites use EUR/USD in all example currency pairs You can even count and determine the smallest trades that can be opened. All use this EUR/USD.
And now the raw spread example uses EUR/USD. And surprisingly, EUR/USD has the lowest average spread for most brokers in the example above. So why is EUR/USD the most important currency pair in forex trading? This question has been on my mind for a long time.
Feb 10 2023
Kenny Tan: Several factors make EUR/USD the most traded and most discussed currency pair in Forex:
This is why Forex uses EUR/USD as an example or standard for simple forex trading.
Feb 10 2023
Thanks for the article. To be honest, I'm still hesitating between these RAWs. As you have seen the comparison in the table above, all RAW spreads start at 0.00 and are the same. But after the author said that you have to see the average spread that happened, I started to know that Pepperstone is the best broker that offers the lowest raw spreads. By the way, I really thank the author and her articles. meanwhile i am really confused about the pip value? I mean what will I win or lose on 1 pip move? Can I count, so I know exactly what fees are incurred when dealing with Pepperstone. THANK!
Feb 10 2023
Jenny: Pip's value is depending on the size tick and what pairs that you trade. The simple pip's value will be the Direct Pair. You can directly know that 1 pip in EUR/USD, GBP/USD, AUD/USD or other pair that has USD as its short position has 1 pip standard = $10. It is because the size tick 0.0001 multiple 100.000 unit (standard lot)
Meanwhile the pip's value at indirect pair needed to be divided by the current position price. For example, in USD/JPY, the size tick is 0.01 (you can see the tick size by seeing how many number behind decimal, for example USD/JPY has bid price 131.19, the size tick is 0,010 or 0.01). The pip value will be 0.01 x 100.000 divided by 131.19. The pip's value in USD/JPY is $7.62.
And last is the cross pair. You need to know about the current direct pair bid/ask price. If you currently trade with GBP/EUR, you will need to see the GBP/USD bid/ask price first. For example bid price is at 1.2121. And then you can count with the formula :
size tick x contract size x bid/ask GBP USD
1 pip's value will be $ 12.121
Feb 10 2023
Udin: Wow, that's really hard to count in indirect pair and cross pair. But thanks, I am little bit understand now. So the fees that may occur in Pepperstone with average spread 0.16 = $10 x 0.16 =$1.6 in standard lot, right? But if I trade with micro lots, the fees that occured in every trade if I get stable spread is at $0.1 x 0.16 = $0.016, right?
That was really low spread fees in there. By the way thanks for the explanation!