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?
Forex.com will make RAW pricing accounts available to clients in both the USA and Canada, and the new service will also be offered to Australian customers under the City Index brand.
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.
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
During his career, Darren has acted for and advised major hedge funds and investment banks such as GLG, Thames River, Ruby Capital and CQS, Dresdner Kleinwort and HSBC.
In addition to the financial analysis and commentary he provides as an editor at GoodMoneyGuide.com, his work has been featured in publications including Fool.co.uk.
As well as extensive experience of writing financial commentary, he previously worked as a Market Research & Client Relationships Manager at Admiral Markets UK Ltd, before providing expert insights as a market analyst at Pepperstone.
Darren is an expert in areas like currency, CFDs, equities and derivatives and has authored over 260 guides on GoodMoneyGuide.com.
He has an aptitude for explaining trading concepts in a way that newcomers can understand, such as this guide to day trading Forex at Pepperstone.com
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A well known authority in the industry, he has provided interviews on Bloomberg (UK), CNBC (UK) Reuters (UK), Tiptv (UK), BNN (Canada) and Asharq Bloomberg Arabia.
