Raw Spread Accounts Are Better for Active Traders, While Standard Accounts Are Better for Beginners
If you're wondering whether a Raw Spread account or a Standard account is better, the answer depends on your trading style.
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Both account types can be profitable, but understanding their differences can help you reduce trading costs and improve your overall performance.
In this guide, we'll compare Raw Spread and Standard accounts in detail, including spreads, commissions, execution quality, trading costs, advantages, disadvantages, and which type of trader should use each account.
A Raw Spread account, sometimes called a Zero Spread or ECN-style account, offers traders access to market spreads that are extremely low and often start from 0.0 pips.
Instead of adding a markup to the spread, brokers charge a separate commission for each trade.
Key Features of a Raw Spread Account
For example:
The spread remains extremely tight, making it attractive for high-frequency trading strategies.
A Standard account is the most common account type offered by forex and CFD brokers.
Instead of charging commissions, the broker includes its fee within the spread.
This means traders pay a wider spread but avoid separate commission charges.
Key Features of a Standard Account
For example:
The entire trading cost is included within the spread.
The biggest difference is the spread.
Raw Spread Account
Standard Account
Winner: Raw Spread Account
Lower spreads can significantly reduce trading costs over time.
Raw Spread Account
Standard Account
Winner: Depends on Trading Style
Some traders prefer paying commissions for tighter spreads, while others prefer commission-free trading.
The real comparison should focus on total cost.
Example Trade
Let's assume you trade one standard lot of EUR/USD.
Raw Spread Account
Standard Account
In this scenario, the Raw Spread account is cheaper.
Winner: Raw Spread Account
Scalpers open and close multiple trades daily.
Even a small difference in spread can have a major impact on profitability.
Raw Spread Benefits for Scalpers
Standard Account Drawbacks
Winner: Raw Spread Account
Day traders frequently enter and exit positions within the same day.
Because they make numerous trades, transaction costs matter significantly.
Raw Spread Account
Standard Account
Winner: Raw Spread Account
Swing traders may hold positions for several days or weeks.
For them, spread costs represent only a small portion of the total trade.
Raw Spread Account
Standard Account
Winner: Tie
Either account can work well for swing traders.
Many new traders prefer simplicity.
Standard Account Advantages
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Raw Spread Challenges
Winner: Standard Account
Automated systems often execute large numbers of trades.
Small spread differences can significantly affect performance.
Raw Spread Advantages
Winner: Raw Spread Account
Let's compare a trader who executes 100 standard-lot trades monthly.
Raw Spread Account
Standard Account
Difference:
This illustrates why many professional traders prefer Raw Spread accounts.
1. Lower Trading Costs
Reduced spreads often result in lower total expenses.
2. Better Market Pricing
Prices are closer to actual market conditions.
3. Ideal for Scalping
Scalpers benefit significantly from tighter spreads.
4. Improved Trade Execution
Many brokers prioritize execution quality for Raw Spread accounts.
5. Greater Transparency
Traders can clearly see spreads and commissions separately.
1. Commission Fees
Every trade incurs commission costs.
2. More Complex Pricing
Calculating total costs requires additional effort.
3. Not Necessary for Long-Term Traders
Position traders may not gain significant advantages.
1. Simplicity
No need to calculate commissions.
2. Beginner-Friendly
Easy to understand and manage.
3. Predictable Costs
Trading expenses are included in the spread.
4. Suitable for Casual Traders
Ideal for those who trade infrequently.
1. Higher Spreads
The main drawback is increased trading costs.
2. Less Efficient for Active Trading
Frequent traders may pay substantially more over time.
3. Lower Scalping Efficiency
Wider spreads make short-term trading more difficult.
A Raw Spread account is usually the better choice if you are:
These traders often save significant amounts through reduced transaction costs.
A Standard account is generally better if you are:
The straightforward pricing structure makes trading easier to understand.
Myth 1: Raw Spread Accounts Are Always Cheaper
Not necessarily.
Some brokers charge high commissions that can offset the benefit of low spreads.
Always calculate the total trading cost.
Myth 2: Standard Accounts Are Only for Beginners
Many experienced traders still use Standard accounts because they prefer commission-free pricing.
Myth 3: Zero Spread Means Free Trading
Even when spreads are near zero, commissions still apply.
Trading is never completely free.
For most active traders, the Raw Spread Account is the better option because it offers lower spreads, reduced trading costs, and superior conditions for scalping, day trading, and automated strategies.
However, the Standard Account remains an excellent choice for beginners and long-term traders who prefer simplicity and commission-free trading.
Choose a Raw Spread Account If:
Choose a Standard Account If:
Ultimately, neither account type is universally better. The best choice depends on your trading frequency, strategy, experience level, and preference for spread-based versus commission-based pricing.
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