Main differences between raw spread trading account and standard trading account lie in trading costs, namely spread and commission fees.
Many forex brokers nowadays provide several types of trading account. Two of the most popular offerings are raw spread trading account and standard trading account. After practicing in the forex demo account, beginners may choose micro or mini account at their starting point, but then they will have to choose between raw spread vs standard account when they are going to upgrade their trading environment. So, here comes the crucial question: which is better, raw spread or standard trading account?
Actually, each forex broker may establish different terms and conditions for their trading accounts. Standard trading account in different brokers would most probably have different fees, maximum leverage, margin requirements, and so on. So does raw spread account. This makes it difficult to decide which type of account is better without knowing in which broker you are going to open the accounts. Still, we could compare general circumstances of raw spread vs standard account apart from those specific terms.
Raw Spread vs Standard Account Comparison
A raw spread trading account, also often called an ECN account, offers real market prices for all instruments. Forex brokers will not add any markup on asset prices, so spreads usually are extremely low or even zero. However, traders have to pay a higher commission fee for each trade executed. Some forex brokers charge the fees for each opening and closing trade ("per side"), while some others may charge fees after one full round-turn.
A standard trading account offers asset prices that have been added a certain amount of markup by the broker. Spreads are usually higher, while commission fee for each trade will be cheaper or even free.
For example, let's assume you want to buy the EUR/USD which is currently traded at 1.2100. If you have a raw spread account, you will probably be able to buy it at 1.2100. As soon as the price rises to any level, you can close the position with considerable profit (although you have to make sure the gain will offset the commission fee as well).
If you have a standard trading account, you probably could only buy it at an ask price of 1.2102. It means you are going to incur a loss of 2 pips as soon as you entered the trade. This is what everybody calls a spread. In order to close the trade in the green, EUR/USD has to rise at least 3 pips. Even so, your profit will always be 2 pips less than what it should be.
Spreads calculation is usually automated so you don't have to count it every single time you open a trade. But if you'd like to check the accuracy of your broker's spreads to its pricing, feel free to use the calculator below:
So, Which One Do You Think is Better?
Every trader may have a different opinion in accordance with their own trading style. If you are a scalper and need to profit from minor changes in asset prices, the raw spread trading account might be more suitable. But if you are a swing trader or position trader, the standard trading account might be more advantageous. Actually, applying a longer-term strategy can give you more freedom in choosing trading accounts; you're not bound to pick the one with the most accurate pricing, unlike short-term strategies which highly depend on it.
You can compare both spread and commission fees that are charged by your chosen broker to make sure which one will incur lower costs for your trading strategies.
For example, IC Markets, a pioneer who popularized the term "raw spread" throughout the world. The Australian-licensed forex broker provides Raw Spread Trading Account with spreads starting from 0 pip and commission fees of $3.0 per standard lot. IC Markets also offers Standard Trading Account with zero commission and spread starting from 1.0 pip. Both could be opened with a starting deposit as low as USD200.
🌐 WebsiteIC 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.
Its fellow Australian forex broker, Pepperstone, also offers both raw spread (under the name "Razor Account") and Standard Account for retail traders. Pepperstone's Razor Account provides institutional grade spreads without markup (average EUR/USD spread at 0.0 - 0.3 pips) and commission starting from $7 for each 100k traded per round turn. While Standard Account charges spread around 1.0 - 1.3 pips and zero commission fees.
| Compare | IC Markets | Pepperstone |
| General Rating |
4.23/5 |
4.43/5 |
| Trustpilot |
4.8/5 29030 users |
4.6/5 1953 users |
| 💼 Regulation | ||
| ❗Information | Testimonials (549), News (61), Promotions (1), Webinars (281) | Testimonials (69), News (14), Promotions (1) |
| ⌛ Established | 2007 | 2010 |
| 💲 Min Deposit | $200 | $0 |
| ⚖ Max Leverage | 1:500 | 1:30 |
| 🔢 Spread | Variable | Variable |
| 💸 Commissions | $3.50 | $7 |
| 💡 Min Position | 0.01 lot | 0.01 lot |
| 💳 Payment | Crypto, BPAY, Credit/debit cards, FasaPay, Neteller, PayPal, Skrill, UnionPay and Wire transfer | Credit/debit cards, PayPal, UnionPay and Wire transfer |
| 🏢 Office(s) |
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| 🧩 Demo Account | ||
| 📁 Segregated Account | ||
| 🕋 Islamic Account | ||
| 👨💻 PAMM Account | ||
| 📈 Managed Account |
| 💱 Hedging | ||
| 🇺🇸 US traders | ||
| 🕛 Swaps |
| 🏆 Trading contests | ||
| ⚡ Automated trading | ||
| 💰 Bonus offers | ||
| 📖 Free education |
| 1️⃣ One-click trading | ||
| ⏱ Trailing stop | ||
| ⏳ Pending orders |
 Forex |
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 CFD
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 Indexes |
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 Spread Betting |
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 Gold & Silver |
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 Crypto |
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 Stocks
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 Oil
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 Metals |
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 Energies |
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 Futures |
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 ETF
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 Options |
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 Agriculture |
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Spread Betting |
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 Indices |
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 Commodities |
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 Shares |
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 Cryptocurrencies |
| 🗣 Website Languages | Arabic, Chinese, English, German, Indonesian, Japanese, Korean, Malay, Portuguese, Russian, Spanish | Chinese, English, Russian |
| 🚪 Trade Now | Open IC Markets | Open Pepperstone |
17 Comments
David Elstob
Mar 29 2021
Spreads are next to nothing on the majors, so the big plus I can see is if you're a professional is for trading exotics, then the Razor account would make sense?
Obviously exotics - especially volatile ones - can have huge spreads on a standard account.
Aisha
Sep 7 2021
Yes, that is correct. I see most traders who prefer raw spread accounts are professionals.
Torima
Feb 24 2023
Aisha: I just got here and am a bit confused as to why the ECN account is similar to the Raw Spread account. Meanwhile the Raw Spread account itself offers lower spreads than the Standard account. And what surprised me is that standard accounts have higher spreads, which may be a burden for some traders. In the meantime, of course, as a beginner, you should trade wisely and trade with a little less commission that you may incur while trading. And of course, with slightly lower fees, you can trade with a little peace of mind
What is the reason that most novice traders trade on standard accounts instead of raw spread accounts? Thank you very much!
Ansu Fati
Feb 24 2023
Torima: In my opinion, the ECN account especially at commission can be higher than standard account. Since it is very normal for broker to charge higher commission if they offered lowest spread. I think they do that in order to balance their profit after giving very low spread.
About the ECN itself, I do admit that spread in there can be very low and stabil. but if you don`t trade carefully at there, and especially traders who open more higher volume, may suffer the commissions. Though want to avoid some spread, you need to face the big commission too
Since the ECN acccount more prefered by pro especially scalper and EA trading, standard account may offer most simple trading condition that may suitable for novice
Dakota Ross
Apr 11 2022
As long as you have enough money, any type of account should not be a problem. Am I right? LOL.
Bill
Jan 2 2023
Novi
Jan 2 2023
Josh
Feb 24 2023
Dakota Ross: Agree! Believe it or not, if you can manage your risk management, a demo account will help you learn all about Forex and be ready to trade live. If a trader with little money had more success in trading that could lead to limited profits, if he had a lot of money and could use it wisely, what would forex trading look like? it will be freer to open position without need to be fear about the floating loss either. Because forex itself requires more money to trade more freely. If you have $100,000 and trade 0.01 lots with leverage of 1:100; Trade Forex with as little as $100 and you'll feel a really different trade.
Roger
Apr 12 2022
I'm still confused about the difference between PAMM account and Managed account. In general, though, the meaning is the same. Explanation on Pepperstone table why do you have PAMM checked but not on Managed account?
Hunter
Apr 13 2022
Roger: It seems the information from this website needs to be updated because on the Peppertone website it is explained that they accept PAMM or MAM accounts. You can check it via this link.
Anita
Jan 2 2023
Yoga
Feb 24 2023
Anita: No, I think you need to read more. I do agree about the PAMM explanation, which is very completed and clear. But I want to say that basically, a managed account is an account type that allows another trader to manage your trades. In fact, one of the types of managed accounts is the PAMM account.
So basically, PAMM and any other type of account can be managed by someone else, most of them are manager money or normally you can call it Managed Account.
And I think the post needs editing about the X in the managed account.
Patricia Anderson
Apr 18 2022
I am today years old to know that raw spread is actually an ECN account? Why do I always think that they are different?
John
Jan 2 2023
Marie
Feb 24 2023
John: I totally disagree. In fact, many STP type brokers can offer functionality similar to ECN accounts. Some of them may have advanced servers that can process orders faster and may even offer lower spreads than standard STP accounts. Eve, the brokers also call the account with Raw Zero Spread or Raw Spread account, but the spread can be slightly higher than the ECN account.
Aside from that, the fees charged seem to be similar. The best thing about an ECN account is that it offers features such as Depth of Market that allow you to see the actual state of the market which STP broker cannot provide.
Angela Thomas
Nov 20 2022
Michael
Jan 2 2023