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Account Types: Choosing Between Standard, Raw, and Others

Brokers often offer several account types. The names differ, but the choices usually reduce to a few trade-offs.

A standard account typically charges no commission and builds costs into wider spreads. Pricing is simple, and it suits traders who place few trades, hold positions longer, or want predictable costs. Spreads might start around one pip for major pairs.

A raw or ECN account offers tight spreads, sometimes near zero, with a fixed commission per lot. It tends to be cheaper for active traders, particularly scalpers and day traders, since the sum of spread and commission is often lower than the standard spread.

Premium or VIP accounts offer reduced costs for larger balances or higher volume, along with extras such as dedicated support.

Cent and micro accounts, discussed earlier, serve beginners.

Swap-free and professional accounts add other differences. Professional classification can increase leverage but remove protections, so understand the trade-offs before applying.

To choose, calculate your total cost per round trip, including commission, for your usual pair and trading hours. Compare account types with your own numbers, using your average lot size and trade frequency.

Also check whether execution differs by account type. Some brokers route raw accounts differently from standard ones.

Review the choice periodically as your style and volume change.

Practical step: compute the total cost per lot of a round trip for each account type of your broker, at the spread you typically see.

Professional classification is the one to be careful with. More leverage sounds nice, but losing negative balance protection and other retail rules is a big trade. Negative balance protection means that in a sudden gap, like the franc event in 2015, you can't lose more than your deposit. Without it, a gap through your stop can leave you owing the broker money. For most retail traders that tail risk isn't worth the extra leverage, especially since good risk management rarely needs more than the leverage retail accounts already allow. If a broker pushes the upgrade hard, ask yourself why they want you to give up those protections.

Run the numbers with your own average lot and trade count. For someone trading a few times a week, the difference between standard and raw can be small, for a scalper it can be most of the edge. Example: a standard account at 1.2 pips on EURUSD versus a raw account at 0.2 pips plus 7 dollars commission per lot round trip. On one lot, the standard costs 12 dollars and the raw costs 2 plus 7, so 9 dollars. On thirty lots a month that's about 90 dollars saved. On 300 lots it's around 900. Check the commission per side versus round trip carefully, since brokers quote it differently.