Spread versus commission accounts: a quick comparison

[Shadow Trader]

Standard accounts usually charge no commission and build the cost into a wider spread. Raw or ECN accounts show tighter spreads, often 0.0 to 0.3 pips on majors, and charge a commission per lot, commonly between 3 and 7 dollars per side.

Converting commission to pips makes comparison easy. A 7 dollar round-trip commission on one standard lot equals 0.7 pips. If the raw spread averages 0.2, the total cost is 0.9 pips. A standard account with an average spread of 1.2 pips costs more.

For scalpers placing many trades, the raw account usually wins. For occasional traders, the difference is marginal.

The catch is that average spread figures advertised by brokers are often measured at calm times. Real costs during active sessions can look different.

The only reliable method is to track real total cost per trade over a month on each account type.

Which account type has produced the lowest all-in cost per trade here?