📖 Forex: Comparing Raw vs Standard Accounts by True Trading Costs
In forex, most brokers offer two core account types: Standard (costs embedded in a wider spread) and Raw/ECN (a tight market spread plus an explicit, volume‑based commission). Beginners often wonder which is ultimately cheaper. The only sound answer is to calculate the full trade cost—the “all‑in”: the spread converted to money plus the commission, without guesswork or marketing claims.
This guide provides a straightforward, no‑nonsense method to compare Raw and Standard accounts, explains the key terms, shows formulas to convert spread/commission into money, walks through four practical scenarios, and compiles a selection checklist. In the end, you’ll compute “all‑in” costs for your trading style and choose confidently.
🧩 Core terms: what we measure and why
First, a glossary. We briefly explain each new concept so the formulas and examples below are easy to use. Definitions are practical and tied directly to the calculations.
Spread: the difference between Ask (buy) and Bid (sell). It’s the immediate cost when entering a trade—the price must move at least the spread for the position to break even. Example: EUR/USD 1.1000/1.1001 → spread 1 pip.
Commission: a fixed fee charged by the broker per volume; on Raw/ECN it’s quoted per lot and may be charged per side or as a round‑turn. Example: $3.50 per side → $7 round‑turn per 1 lot.
Pip: the minimum price increment (typically 0.0001; for JPY pairs—0.01). Rule of thumb for a 1‑lot EUR/USD trade: 1 pip ≈ $10.
Lot: the standard trade size of 100,000 units of the base currency. Mini lots (0.10) and micro lots (0.01) scale pip value and commission proportionally.
Raw/ECN (STP/NDD): a model with tight “raw” market spreads plus a separate volume‑based commission; often faster and more transparent for active trading.
Standard (markup): no separate commission—the broker earns by widening the spread; convenient for getting started and for infrequent trades.
All‑in costs: the full trade cost = spread converted to money + commission (± swaps if you hold overnight).
🧮 “All‑in” in one formula: convert pips and commission into money
The logic is simple: first compute what the spread costs in your account currency, then add the round‑turn commission. For a fair Raw vs Standard comparison, express both in dollars.
Full trade cost formula
All‑in ($) = Spread (in pips) × Pip value ($) × Volume (lots) + Commission ($, round‑turn)How to estimate pip value
For pairs quoted in USD (EUR/USD, GBP/USD, etc.), for 1.00 lot 1 pip ≈ $10; for 0.10 lot ≈ $1; for 0.01 lot ≈ $0.10. For other pairs, refer to your broker’s contract specs or the platform’s calculator.Converting commission into pips (to compare with Standard)
Commission equivalent, pips = Commission ($, round‑turn) ÷ Pip value ($) ÷ Volume (lots). Example: a $7 commission for 1 lot at $10/pip → ~0.7 pips “on top.” If the market spread is 0.3 pips, the effective Raw spread is ~1.0 pip.
Tip: compare conditions during the same hours you actually trade. Spreads widen at night and tighten during the day; an honest calculation averages your real sessions and instruments.
📐 Break‑even threshold: when Raw = Standard
Idea: find the breakeven point where Standard and Raw costs match. This quickly shows which account type suits your volume and trading hours.
| Variable | Symbol | Meaning |
|---|---|---|
| Average Standard spread, pips | SS | Typical spread on the Standard account during your hours |
| Average Raw spread, pips | SR | Typical market spread on ECN during your hours |
| Raw commission per round‑turn, $ | C | Round‑turn per lot (scale to your volume) |
| Pip value, $ | V | $ per 1 pip at your volume (depends on pair and lot size) |
🧠Break‑even formulas
Raw is cheaper than Standard if: SR + (C ÷ V) < SS.
Commission equivalent in pips: CE = C ÷ V. Then the effective Raw spread = SR + CE.
Threshold SS* where both accounts are equal: SS* = SR + CE. If your actual SS is higher—choose Raw; if lower—Standard.
Bottom line: once you compute CE for your volume (e.g., $7 at $10/pip → 0.7 pips for 1 lot), you can eyeball‑compare any Raw spread to Standard directly in pips.
Rule of thumb: for EUR/USD at 1 lot, a $7 commission ≈ 0.7 pips. Add this to the average Raw spread and compare with Standard. At 0.10 lot it’s ~0.07 pips; at 2 lots it’s ~1.4 pips.
🧮 Pip value across pairs and account currencies
General rule: for a Base/Quote pair with lot size L (typically 100,000) and pip step P (0.0001 or 0.01), the pip value in the quote currency equals L × P. If your account currency differs from the quote currency, convert at the current rate.
| Case | Formula for 1 lot | Comment |
|---|---|---|
| XXX/USD (account in USD) | V ≈ $10 per pip | Classic: EUR/USD, GBP/USD, etc. |
| XXX/JPY (account in USD) | V = (L × 0.01) ÷ USDJPY | Example: with USDJPY = 145 → V ≈ 1000/145 ≈ $6.90/pip |
| Cross without USD (account in USD) | V = (L × P) × (Quote→USD) | First get the pip value in the quote currency, then convert to USD |
| Any lot q | V(q) = V(1.0) × q | For 0.10 lot multiply by 0.10; for 2 lots—by 2 |
Practice: most platforms display “Pip value” for your volume in the order ticket. Cross‑check the formula with the actual value—and use that V in your “all‑in” calculations.
🧪 How to measure your real costs (method)
Why: average spreads and commissions are theory. Verify what you pay “in the wild” during your hours and on your instruments.
- Collect data: enable a spread indicator in your platform and log values at entry/exit (or export trade history to CSV).
- Record: time, symbol, volume, price, spread (pips), commission ($), swap ($), slippage (pips).
- For each trade, compute “all‑in” in $: (spread_pips × V × q) + commission + swap.
- Make 30–50 samples over a week in your actual trading hours. Compute the median and the 75th percentile of “all‑in” to capture normal and “bad” conditions.
- Repeat the procedure on Standard and Raw with the same broker, then compare brokers.
Mini table template
Fields: Date/Time | Pair | Volume | Spread (pips) | Commission ($) | Swap ($) | Slippage (pips) | V ($/pip) | All‑in ($).
Bottom line: if the median “all‑in” on Raw is consistently lower than Standard by ≥15–25% in your hours, stick with Raw for active trading. If the gap is ≤5% and volumes are small, Standard is more comfortable.
⚙️ How Standard and Raw/ECN accounts work
Two models—two ways to pay. On Standard you pay more through the spread (with no separate commission); on Raw you pay less through the spread but add an explicit volume fee. Below—short and to the point.
Standard account (markup)
All fees are embedded in the spread: simple for starting out and for rare trades, but the spread is wider than on ECN.
- ✅ Beginner‑friendly: no separate commission per trade.
- ✅ Predictable costs for unhurried trading and small volumes.
- ❌ Wider spreads → higher break‑even, weaker for scalping.
- ❌ During news or thin hours spreads widen more noticeably.
Raw/ECN account
Tight market spreads + an explicit volume‑based commission. Optimal for frequent entries and active strategies.
- ✅ Tight spreads → precise entries, smaller initial offset at entry.
- ✅ Transparent pricing: easy to compute “all‑in” and compare brokers.
- ❌ The commission is noticeable with micro volumes and infrequent trades.
- ❌ More demanding of discipline and execution quality.
⚖️ Pros and cons: side‑by‑side
✅ Pros of Standard
- Simple cost model—everything is in the spread.
- Comfortable for starting and learning.
- With micro volumes, the dollar gap vs ECN is minimal.
❌ Cons of Standard
- Wider spreads → worse for scalping/intraday.
- Spread widenings on news hit entries harder.
- Harder to take tight targets and “thin” bounces.
✅ Pros of Raw/ECN
- Minimal spreads on liquid pairs.
- Transparency: the commission is visible and easily converted to pips.
- Often better execution in active markets.
❌ Cons of Raw/ECN
- The commission stands out on rare and micro trades.
- Sometimes higher requirements for deposit/conditions.
- Think in “all‑in” terms—don’t just chase “0 pips.”
📘 “All‑in” examples: 4 typical scenarios
All numbers are instructional. Plug in your actual spreads and commissions from the broker’s spec to get precise values for your trading.
Scenario 1 — One intraday trade with 1 lot
Compare one‑off costs on a Standard vs a Raw account at a typical 1.00‑lot volume.
- Standard: ~1.2 pips × $10 = $12.
- Raw: ~0.3 pips × $10 = $3 + $7 commission = $10.
Bottom line: Raw saves about $2. More noticeable for scalping, but the absolute gap is moderate.
Scenario 2 — Active month: 100 trades at 1 lot
Simulating an active trader with a hundred trades per month at the standard volume.
- Standard: ~1.5 pips × $10 = $15/trade → ~$1500 per month.
- Raw: ~0.5 pips × $10 = $5 + $6 commission = $11/trade → ~$1100 per month.
Bottom line: about $400 saved (≈27%) in favor of Raw. The more trades, the larger the advantage.
Scenario 3 — Swing trading: ~12 trades at 1 lot
Infrequent 1.00‑lot trades, positions held for several days.
- Standard: 12 × ~$15 = ~$180.
- Raw: 12 × ~$11 = ~$132.
Bottom line: Raw is 20–30% cheaper, but the absolute saving is small. Here simplicity and habit matter more.
Scenario 4 — Beginner on micro volumes: 0.10 lot, 10 trades
Minimal trades for a novice, 0.10 lot on popular pairs.
- Standard: 1.5 pips × $1 = ~$1.50/trade → ~$15 for 10 trades.
- Raw: 0.5 pips × $1 = $0.50 + $0.60 commission = ~$1.10/trade → ~$11 for 10 trades.
Bottom line: about $4 per month difference—almost negligible. For starting out, Standard is more convenient; you can switch to Raw later.
🧪 Additional scenarios: when the difference becomes material
Scenario 5 — Intraday 2 lots, one trade
Check how visible the saving is when trading a larger size (2.00 lots) for a single in‑out.
- Standard: 1.2 pips × $20 = $24.
- Raw: 0.2 pips × $20 = $4 + $14 commission = $18.
Bottom line: Raw is cheaper by ~$6 per trade. At 20 trades per month that’s ~$120—already noticeable.
Scenario 6 — Micro volumes 0.01 lot, 50 trades/month
Assessing costs at ultra‑small size: micro lot 0.01 with frequent trades.
- Standard: 1.2 pips × $0.10 × 50 ≈ $6.
- Raw: 0.2 pips × $0.10 × 50 = $1 + $0.07 commission × 50 = $3.50 → total ~$4.50.
Bottom line: about $1.50 saved per month—peanuts. At this size, Standard’s simplicity and comfort matter more.
⚡ What happens to spreads on news
Fact: when key data is released, spreads widen on any account type. The gap between account types narrows while slippage becomes more influential.
| Situation | Raw/ECN | Standard | Note |
|---|---|---|---|
| Calm market | ~0.1–0.5 pips + commission | ~0.8–1.5 pips without commission | Raw is almost always cheaper “all‑in.” |
| News release | may widen to 2–3+ pips + commission | may widen to 4–6+ pips | Raw’s advantage remains but shrinks; execution quality is decisive |
| Thin overnight liquidity | spread widens moderately | spread widens more strongly | Raw is still better, but the difference is smaller |
Important: don’t expect a “zero spread” on ECN to save you from slippage. On impulses, risk management and a sensible stop buffer matter more than the account type.
📊 Summary table: when each account is cheaper
| 🧠 Scenario | 💸 Standard (all‑in) | 💸 Raw/ECN (all‑in) | 📝 Comment |
|---|---|---|---|
| One intraday trade, 1 lot | ~$12 | ~$10 | Raw is slightly cheaper; more noticeable with tight targets. |
| 100 trades/month, 1 lot | ~$1500 | ~$1100 | Saving in favor of Raw ~25–30%+. |
| 12 trades/month, 1 lot | ~$180 | ~$132 | Raw is cheaper, but the absolute difference is small. |
| Micro size: 0.10 lot | ~$15/10 trades | ~$11/10 trades | There is a saving, but tiny—Standard is simpler for starting out. |
In short: the more active and frequent your trading, the more Raw/ECN makes sense. The rarer and smaller your trades, the calmer the Standard route.
How to use: plug in your average spreads and commission from the broker’s spec, take V from the order ticket, compare “all‑in” row by row, and choose the account with the smaller total.
🧭 Account selection flow for your style
- Define your mode: trade frequency, average size, trading hours, typical leverage, and pip targets.
- Collect realistic spreads for your pairs during your hours (not the “minimum,” but the typical).
- Confirm the Raw/ECN commission in $/lot (and whether it’s per side or round‑turn).
- Compute “all‑in” for your scenarios: spread in $ + commission. Compare with Standard.
- Run a demo on both account types for 1–2 weeks, checking calculations against actuals.
- Pick your driver of savings: if spread pain dominates—go Raw; if simplicity matters most—go Standard.
Tip: keep both account types. Use Raw/ECN for scalping, and Standard for rare positional entries or tests. Switching by task saves both money and nerves.
🧪 Broker conditions checklist
What to confirm in the spec
Important: compare accounts only by “all‑in”—the spread in money plus the commission. A “zero‑spread” banner without the commission factored in can cost more than a neat Standard.
🏦 How to read conditions at popular Forex brokers
One method fits all. Below are pointers on what to check in “Trading Conditions” and how to quickly estimate the effective spread on Raw (spread + commission equivalent in pips).
🏦
IC Markets / Pepperstone / Exness: typically offer both Standard and Raw/ECN. Check average spreads for EUR/USD and your “working” pair, note the commission in $/lot round‑turn, and convert it to pips for the “Raw effective spread.”
🏦
RoboForex / FXTM / XM: follow the same steps: typical spread (not the minimum), commission per lot, and swaps. On micro volumes the absolute difference between account types is small—choose simplicity.
🧮
Quick math: “Raw effective spread” = average Raw spread + (commission $ ÷ $/pip ÷ lots). Compare with the average Standard spread → choose the smaller “all‑in.”
Note: we intentionally don’t quote specific numbers—they depend on time, liquidity, and each broker’s policy. Take figures from the current spec and plug them into the formulas from section “🧮”.
🧠 Common misconceptions and how to avoid them
Beginner mistakes
- “0‑pip spread” = “0 cost.” In reality, the commission adds the “missing” pips in monetary terms.
- Comparing by the minimum spread. You must compare by the average during your hours and include commission.
- Ignoring pip value. $/pip differs across pairs and sizes—without it, comparisons are incorrect.
- Choosing “for life.” Keep both account types and switch by task; that’s normal.
The main point: the only honest criterion is “all‑in” in $ for your typical in/out. Everything else is secondary.
🧩 Platform, commission, and execution: nuances that move “all‑in”
Why can one broker end up “more expensive” than another even with similar numbers? Details of execution and pricing.
- Per side vs round‑turn. The commission can be quoted per side or for the full round‑turn. For a fair comparison, convert everything to round‑turn.
- Platform fee. On cTrader vs MT4/MT5, the commission per lot can differ slightly with the same spreads. Verify the tariff in your platform.
- Order execution. ECN/NDD reduces requotes but slippage remains. On Standard, requotes are possible on sharp moves. Build a buffer into risk management.
- Liquidity in your hours. If you trade at night, average spreads over the Asian session rather than the day—the final “all‑in” can differ twofold.
- Volume discounts. Some brokers lower commission stepwise as monthly turnover grows. This shifts the break‑even in favor of Raw.
🚀 Pick a Forex broker for your style
Match average spreads and commissions, compute your “all‑in” in 2 minutes, and start trading deliberately.
❓ Frequently asked questions (FAQ)
Which is cheaper—commission‑free or commission‑based?
There’s no universally cheaper option. Compare “all-in”: spread in $ + commission. Raw usually wins in active trading and scalping, while with rare trades and micro sizes the difference is minimal—making Standard preferable for its simplicity.
Which account should a beginner choose?
Start with Standard: the model is easier, there are no separate charges, and in dollar terms the gap vs ECN at micro size is small. Once you increase frequency/size, open a Raw account and switch by task.
How do I quickly estimate the effective spread on Raw?
Take the average Raw spread + (commission $ ÷ $/pip ÷ lots). This gives the “Raw effective spread” in pips. Compare it with the average Standard spread and choose the smaller.
Do swaps differ between Standard and Raw?
As a rule, no—swaps depend on the pair and direction (long/short), not the account type. Check the instrument specification.
What to do about spread widenings on news?
Plan for the worst scenario: compare average spreads separately for calm hours and for news windows. If you trade the news, Raw with a known commission often yields a smaller “all‑in,” but watch slippage.
The commission is quoted per side. How do I convert?
Multiply by 2: round‑turn = per side × 2. Use round‑turn in the “all‑in” calculation so you can add it to the spread in money.
My account isn’t in USD. How do I compute V ($/pip)?
First find the pip value in the quote currency (L × P), then convert to your account currency at the current rate. Easier—check “Pip value” in the platform’s order ticket: the terminal accounts for your account currency automatically.
What about cross pairs (e.g., EUR/JPY)?
In XXX/JPY the step is 0.01: V(1 lot) = (100,000 × 0.01) ÷ USDJPY (for a USD account). For other crosses, use V = (100,000 × 0.0001) × (Quote→USD). At any volume, multiply the value by the lot size.
Does it make sense to switch the account type by time of day?
Yes—some traders keep both: during the day (tight spreads) use Raw; at night or for rare trades use Standard. Just avoid splitting capital excessively and consider any transfer fees between accounts if applicable.
Why are my actual costs higher than “by the table”?
Possible reasons: you used the minimum instead of the average spread; you traded in thin hours; you were hit by news-time widening; you didn’t include slippage; or your commission is quoted per side. Recalculate using the “🧪 How to measure your real costs” method and use the median.
✅ Conclusion
Spread and commission are two ways to pay for the same service: trade execution. Standard charges more via price, while Raw charges less via price but adds an explicit volume fee. “Which is cheaper?” is answered only by arithmetic on your numbers.
The method is simple: take the typical spread during your hours, convert it into $ for your size, add the commission (if any)—that’s your “all‑in”; then compare accounts. Active traders and scalpers will almost always prefer Raw; for beginners and rare trades, Standard is comfortable. Keep both types and use them flexibly.
Main point: always compute “all‑in” for your scenario—spread in $ + round‑turn commission; choose the account with the smaller total and the execution that fits.