raw spread vs standard account for 2025

raw spread vs standard account Guide

Analysis by Andrew Blumer, Updated Last updated - January 29, 2025

Raw Spread Vs Standard Account

Regarding forex trading accounts, traders, especially beginner traders, often face the dilemma of choosing between a raw spread account and a standard account to trade Forex. Understanding the differences and benefits of each account type is crucial for making informed decisions. In this article, we will answer the top questions regarding raw spread vs standard accounts to help traders navigate the trading environment and select the most suitable account for their needs.

Each account type has unique features and benefits, catering to different trading styles and objectives. In this article, we will delve into the distinctions between raw spread and standard accounts, exploring their characteristics, per trade brokerage fee, asset prices, which trading accounts open under your local financial regulatory region, standard account raw spread, swap free account availability, available account base currency, the raw spread and standard best starting account, how a trade executed and more, market trends, Islamic Accounts when selecting trading accounts and FX raw accounts vs standard accounts.

Difference Between Raw Spreads And Standard Accounts

The main difference is spread calculations. Raw spread accounts offer traders the same features and access to the raw interbank spreads, providing the tightest spreads possible. On the other hand, standard accounts incorporate the broker's spread markup, which may be fixed or variable.

Features	Raw Spread Account	Standard Account
Spread	Tightest spreads sourced directly from liquidity providers	Broker's spread markup may be fixed or variable
Trading Style	Ideal for active traders, scalpers, and day traders	Suitable for position traders or beginners
Trading Costs	Lower trading costs due to tight spreads	Slightly higher spreads due to the broker's spread markup
Leverage	Higher leverage options	Varies depending on the broker
Trading Instruments	Access to a wide range of financial instruments	Access to a wide range of financial instruments
Suitability	Active traders looking for the most accurate pricing	Position traders or beginners seeking a simpler approach

Raw Spread Accounts: Optimizing Trading Precision

• Accessing Real Market Prices: Raw spread accounts provide traders with access to the most accurate and real-time asset prices sourced directly from liquidity providers. Ensuring that traders receive the most precise pricing available in the market.

• Tight Spreads and Low Trading Costs: Raw spread accounts offer tight spreads, as the broker imposes no additional markups. Consequently, trading costs reduce, allowing traders to maximize their potential profits.

• Ideal for Active Traders: Raw spread accounts are well-suited for active traders who execute multiple trades during a trading session. With quick execution and competitive pricing, these accounts facilitate the strategies of scalpers and day traders.

Standard Accounts: Balancing Simplicity and Functionality

1. Fixed or Variable Spreads: Standard accounts incorporate the broker's spread markup, which can be fixed or variable. While the spreads may be slightly wider than raw spreads, these accounts offer simplicity and ease of use.

2. Versatility in Trading Styles: Standard accounts accommodate a wide range of trading styles, making them suitable for position traders and traders who prefer a more straightforward approach to trading.

3. Understanding Per Trade Brokerage Fees: Standard accounts typically include the trading costs within the spread, eliminating the need for separate commission fees. This structure simplifies calculations, ensuring traders can focus on making accurate trading decisions.

Selecting the Right Account Type

• Consider Your Trading Experience: Beginner traders may find it advantageous to start with a basic or mini forex trading account, such as an intermediate or basic account, which offers lower minimum deposit requirements. Seasoned traders, on the other hand, may seek more advanced features and opt for a top-notch account.

• Analyze Trading Objectives: Identify your trading goals and preferred trading style. Position traders who hold trades for longer durations may lean towards a standard trading account, while active traders who capitalize on short-term price movements may opt for a raw spread account.

• Assess Broker Offerings: Research and compare the forex account types offered by different brokers. Look for a broker like IC Markets that provides a range of account options, including raw spread and standard accounts, to cater to diverse trading needs.

What is a raw spread trading account?

A raw spread account is a type of forex trading account offered by brokers that provides traders with direct access to the market without any markups or additional spreads. It provides the most accurate pricing available as it is sourced directly from liquidity providers.

What is a standard account?

A standard account is a traditional forex trading account that incorporates a fixed spread or variable spread provided by the broker. The spread is the difference between a financial instrument's buy and sell price and represents the trading cost.

Which trading style is suitable for raw spread accounts?

Raw spread accounts are ideal for active traders who execute numerous trades during a trading session. Scalpers and day traders, who rely on quick trades to capture small market movements, can benefit from the tight spreads offered by raw spread accounts.

Are there any advantages to using a standard account?

Standard accounts benefit traders who employ a position trading strategy. These traders tend to hold trades for longer durations and are less concerned about short-term spread variations. Standard accounts may also be suitable for beginners or traders who prefer a more straightforward approach to trading.

Raw Spread vs Standard Account Advantages and Disadvantages

	Advantages	Disadvantages
Raw Spread Accounts	Tightest spreads sourced from liquidity providers Access to real market prices Lower trading costs Ideal for active traders and scalpers Fast trade execution	May have higher initial trade sizes Can be more complex for beginner traders Requires advanced risk management Higher minimum deposit requirements
Standard Accounts	Simpler and user-friendly trading experience Flexible trading styles Lower initial trade sizes Lower minimum deposit requirements May suit position traders and beginners	Wider spreads due to broker markup May have slightly higher trading costs Less precise asset pricing Not ideal for high-frequency trading

What is a micro or mini account?

Micro or mini accounts are trading accounts designed for beginner traders with limited capital. These accounts often have smaller contract sizes and lower minimum deposit requirements than standard accounts.

Can raw spread accounts be considered mini forex trading accounts?

Raw spread accounts can be considered mini forex trading accounts. The term 'mini' usually refers to the smaller contract sizes available for trading, and raw spread accounts can offer such flexibility.

How do raw accounts differ from standard accounts in terms of financial instruments?

Both raw spread and standard accounts provide access to various financial instruments, including currency pairs, commodities, indices, and more. The difference lies in the pricing and trading costs associated with these instruments.

Are there any differences in trading costs between raw spread and standard accounts?

Yes, there are differences in trading costs. Raw spread accounts typically have lower trading costs due to the tight spreads offered, while standard accounts may have slightly higher spreads due to the broker's spread markup.

Raw Spread and Standard Islamic Accounts

Raw Spread Islamic Accounts

Transparency and Low Costs Raw Spread Islamic Accounts provide Muslim traders with a transparent and cost-effective trading experience while complying with Sharia principles. Here are the main features:

• Transparency in Pricing: Raw Spread Islamic Accounts offer access to actual market prices and direct liquidity provider spreads without any additional markups. This transparency ensures fair and accurate pricing for traders.

• Tight Spreads: These accounts provide traders with the tightest spreads available in the market, ensuring competitive trading conditions and minimizing trading costs.

• Commission-Based Pricing: Raw Spread Islamic Accounts typically charge a fixed commission per trade instead of incorporating the trading costs within the spread. This structure allows traders to have a clear understanding of the fees involved.

• Suitable for Active Traders: Raw Spread Islamic Accounts are ideal for active traders who engage in frequent trading activities, such as scalping or day trading. The low trading costs and fast trade execution make these accounts attractive for traders with a high trading frequency.

Standard Islamic Accounts

Simplicity and Sharia Compliance Standard Islamic Accounts offer Muslim traders a simplified and Sharia-compliant trading experience. Here are the main features:

• Sharia-Compliant Trading Conditions: Standard Islamic Accounts ensure that all trading activities align with Sharia principles, which prohibit earning or paying interest (riba) and engaging in speculative transactions (gharar).

• No Swap or Rollover Charges: Islamic Accounts operate without swap or rollover charges. Instead, traders may incur an administration fee or receive/charge an equivalent profit-sharing fee for positions held overnight.

• Fixed or Variable Spreads: Standard Islamic Accounts may offer fixed or variable spreads, allowing traders to choose an account type that suits their trading style and preferences.

• Versatility in Trading Styles: Standard Islamic Accounts accommodate various trading styles, including position trading, swing trading, or long-term investing. These accounts are suitable for traders who prioritize simplicity and compliance with Islamic principles.

What is the IC Markets demo account?

IC Markets is a well-known forex broker that provides a demo account for traders to practice their trading strategies and familiarize themselves with the broker's trading environment. A demo account allows traders to trade with virtual funds without risking real money.

What is the significance of opening and closing trades in forex trading?

Opening a trade refers to initiating a position in a financial instrument while closing a trade refers to exit that position. The timing and execution of these trades are crucial for traders to achieve their desired profits.

Do forex brokers provide both a raw spread and standard accounts nowadays?

Yes, many forex brokers nowadays offer both raw spread accounts and standard accounts to cater to the diverse needs of traders. Traders can choose the account type that aligns with their trading style and preferences.

What are the risks involved in forex trading? What are the risks involved in forex trading?

Forex trading carries inherent risks that traders should be aware of. These risks include:

• Market Risk: Forex markets are subject to price fluctuations and volatility, which can result in potential losses. Changes in economic, political, or global events can impact currency values.

• Leverage Risk: Forex trading often involves the use of leverage, which allows traders to place a lower deposit than there risk exposure. While leverage can amplify profits, it can also magnify losses, leading to significant financial risk.

• Counterparty Risk: Traders face the risk that their forex broker may not fulfil their obligations. Choosing a reputable broker with a solid track record is important to mitigate this risk.

• Liquidity Risk: Certain currency pairs or trading sessions may experience lower liquidity, which can impact order execution and lead to slippage or difficulty in closing positions at desired prices.

• Operational Risk: Technical issues, internet connectivity problems, or platform malfunctions can disrupt trading activities and potentially result in losses. Traders should have contingency plans in place to manage such risks.

• Regulatory Risk: Changes in regulatory frameworks or policies governing forex trading in different jurisdictions can impact trading conditions and affect traders' strategies and profitability.

How does risk management apply to raw spread vs standard accounts?

Risk management is crucial in forex trading regardless of the account type. Traders should implement strategies such as setting stop-loss orders, managing position sizes, and diversifying their portfolios to mitigate potential losses. Both raw spread and standard account trading must include sound risk management practices.

What is the maximum leverage typically offered in raw spread vs standard accounts?

The maximum leverage offered may vary depending on the broker, the account type (raw account standard account), and your local region's financial regulator. In the UK, Max leverage is 30:1. However, it is important to note that raw spread accounts are often associated with higher leverage options, as they are popular among active traders who seek to maximize their trading potential.

Regarding forex trading accounts, one important factor is the maximum leverage different account types offer. Leverage allows traders to control larger positions with less capital, amplifying potential profits and losses. Let's explore the maximum leverage offered in raw spread accounts versus standard accounts and understand their implications for traders.

Who is IC Markets?

IC Markets is an well established international forex broker that offers a range of trading accounts and services to retail traders. They are known for providing competitive spreads, access to multiple trading platforms, and various trading instruments.

What are the features of IC Markets accounts?

IC Markets offers various accounts, including raw spread and standard accounts. These accounts provide access to different trading conditions, spreads, and commission structures, allowing traders to choose the best option.

It's important to note that the features offered by IC Markets may change, so it's advisable to refer to their official website or contact their customer support for the most up-to-date information.

Here are the features of IC Markets' Raw Spread Account and Standard Account:

IC Markets Raw Spread Account:

• Tight Spreads: Access to raw interbank spreads sourced from liquidity providers.

• Low Trading Costs: Competitive commission-based pricing structure.

• High Leverage: Maximum leverage options available for increased trading potential.

• Scalping-Friendly: Suitable for scalpers and active traders who execute numerous trades.

• Fast Execution: Quick order processing and trade execution.

• Advanced Trading Platforms: Supports MetaTrader 4 (MT4) and MetaTrader 5 (MT5).

• Wide Range of Instruments: Access to various financial instruments, including currency pairs, commodities, indices, and more.

• Robust Technology: Stable trading infrastructure with minimal downtime.

• Risk Management Tools: Options for setting stop-loss orders and implementing risk management strategies.

IC Markets Standard Account:

• Fixed or Variable Spreads: Spreads determined by IC Markets' spread markup.

• All-Inclusive Pricing: No additional commissions charged; trading costs are included in the spread.

• Flexible Trading Styles: Suitable for position traders and traders who prefer a simpler approach.

• Multiple Trading Platforms: Compatible with MetaTrader 4 (MT4) and MetaTrader 5 (MT5).

• Diverse Instrument Selection: Access to a wide range of financial instruments.

• User-Friendly Interface: Easy-to-navigate trading platform suitable for traders of all experience levels.

• Market Execution: Trades executed at the prevailing market prices.

• Risk Management Tools: Options for setting stop-loss orders and managing risk exposure.

• Customer Support: Access to customer support services to assist with any account-related queries.

What is the role of the MetaTrader trading platform in forex trading?

The MetaTrader trading platform, commonly known as MT4 or MT5, is a popular choice among forex traders. It provides:

• A user-friendly interface.
• Advanced charting tools.
• Technical indicators.
• The ability to automate trading strategies using expert advisors (EAs).

Many brokers, including IC Markets, offer the Metatrader platform to their clients.

What factors should traders consider when selecting a trading account?

When selecting a trading account, traders should consider factors such as trading style, preferred trading instruments, leverage options, spreads, commissions, trading platform compatibility, minimum deposit requirements, customer support, and regulatory oversight. Assessing these factors will help traders choose the account type that aligns with their trading goals and preferences.

What is the best forex account type for beginner traders?

For beginner traders, starting with a basic or mini account that offers lower minimum deposit requirements and smaller position sizes is generally recommended. They allow beginners to gain experience and understand the intricacies of forex trading while managing their risk exposure. Additionally, demo accounts allow traders to practice trading strategies without risking real money.

Raw Spread Vs Standard Account Verdict

Understanding the differences between raw spread and standard accounts is essential for forex traders. Consider your trading style, risk tolerance and preferences when deciding between the two account types. Raw spread accounts suit active traders who value tight spreads and fast trade execution. In contrast, standard accounts may be more suitable for position traders or beginners who prefer a simpler approach to trading. It's important to choose a reputable forex broker like IC Markets that offers a variety of account types, robust trading platforms, competitive pricing, and strong risk management tools. By carefully considering these factors and implementing sound risk management strategies, traders can optimize their trading experience and increase their chances of success in the forex market.

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