Forex.com is introducing a new way for clients to access Forex liquidity via what it calls a RAW pricing account which offers customers narrow or no bid-offer spreads.
Forex.com RAW spreads
Raw prices are effectively the prices that Forex.com receives from the market via its liquidity providers, and rather than marking these prices up before distribution, the prices are sent to customers directly.
That means narrower spreads, with the typical bid-offer spread in EURUSD coming in at 0.00 pips and at 0.1 pips on AUDUSD.
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The typical spread is defined as the median spread available.
Narrower spreads mean more trading opportunities and possibly many more profitable, and fewer loss-making trades.
Scratching a trade becomes more economical if you are paying little or no spread, and there is a far lower hurdle to overcome before a trade moves into profit, as well.
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How do you get access to a RAW pricing account?
To access the new RAW spreads service clients will need to apply for a RAW pricing account with Forex.com, however as the noted economist Milton Friedman famously said:
“There is no such thing as free lunch.”
The narrow spreads on the RAW pricing account are offset by a US$7.00 commission per $100k traded.
So if you trade 10 lots or $1.0 million worth of FX you pay $70.00 of commission, on both sides of the trade.
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Which jurisdictions will Raw pricing be offered in?
Nasdaq-listed, Stonex Group Inc owns both businesses and brands.
Forex.com are not the only broker to offer raw spreads. Australian-based Pepperstone has its Razor account, which offers narrower spreads and volume-based commission charges, though the broker does not have a US or Canadian operation.
Forex.com traders can further reduce their overall trading expenses if they sign up for the firm’s Active Trader program, under which they can earn rebates of up to $10.00 per million traded.
Is Raw pricing suitable for all traders?
RAW pricing accounts may well make sense for those traders who have an active trading strategy and high trading volumes, but they won’t always be beneficial for other traders.
So it’s important to crunch some numbers before you open one of these accounts.
One way to decide if it’s for you is to look back over a couple of quarters of trading, working out what your average monthly turnover was, and what your expenses were over a monthly time frame, which, will give you a basis on which to compare accounts and charges.