What is the difference between raw and standard account in FP Markets? (2024)

FP Markets is a prominent global broker that offers a range of trading account types to cater to the diverse needs of its clients. Two of the most common account types offered by FP Markets are the Raw and Standard accounts. Understanding the key differences between these two account types is crucial for traders to select the option that best suits their trading style, risk appetite, and investment goals.

FP Markets Account Types: Raw vs. Standard

Raw Account

• The Raw account is designed to provide traders with direct access to the interbank market, offering tighter spreads and lower trading costs.
• This account type is typically favored by experienced traders, professional traders, and those who engage in high-frequency trading strategies.
• Raw accounts are known for their ability to offer competitive pricing, which can be particularly beneficial for traders who execute a large number of trades.

Standard Account

• The Standard account is the more traditional and accessible account type offered by FP Markets.
• This account is suitable for a wide range of traders, including beginners and those with moderate trading experience.
• Standard accounts generally offer slightly wider spreads compared to Raw accounts, but they may also have lower minimum deposit requirements and more accessible leverage options.

Spreads: The Key Difference

The primary distinction between Raw and Standard accounts at FP Markets lies in the spreads offered.

Raw Accounts

• Raw accounts provide traders with access to tighter spreads, which are the difference between the bid and ask prices of a financial instrument.
• The spreads on Raw accounts are typically lower than those offered on Standard accounts, as they are designed to provide traders with more competitive pricing.
• This can be particularly beneficial for traders who engage in high-frequency trading or strategies that rely on capturing small price movements.

Standard Accounts

• Standard accounts generally have slightly wider spreads compared to Raw accounts.
• The wider spreads on Standard accounts are a trade-off for the lower minimum deposit requirements and more accessible leverage options.
• While the spreads on Standard accounts may not be as tight as those on Raw accounts, they are still competitive and can be suitable for a wide range of traders, including those who are new to the market.

Trading Costs and Fees

The trading costs and fees associated with Raw and Standard accounts can also differ.

Raw Accounts

• Raw accounts may have higher trading costs, such as commissions or other fees, compared to Standard accounts.
• This is because the tighter spreads offered on Raw accounts are often offset by the higher trading costs.
• However, the potential benefits of the tighter spreads may outweigh the higher trading costs for traders who execute a large number of trades.

Standard Accounts

• Standard accounts typically have lower trading costs, such as lower commissions or no commissions at all.
• The wider spreads on Standard accounts help to offset the lower trading costs, making them a more accessible option for traders who are new to the market or have a smaller trading account size.

Commission Structure

The commission structure for Raw and Standard accounts can also vary.

Raw Accounts

• Raw accounts may have a commission-based pricing structure, where traders pay a per-trade commission in addition to the spread.
• The commission on Raw accounts is generally lower than the spread, which can be beneficial for traders who execute a large number of trades.

Standard Accounts

• Standard accounts may have a spread-only pricing structure, where traders do not pay a per-trade commission.
• The wider spreads on Standard accounts are the primary source of trading costs for these account types.

Slippage and Execution Speed

Slippage and execution speed can also be factors that differentiate Raw and Standard accounts.

Raw Accounts

• Raw accounts are often associated with faster execution speeds and lower slippage (the difference between the expected price of a trade and the actual price at which the trade is executed).
• This is because Raw accounts have direct access to the interbank market, which can result in more efficient order execution.

Standard Accounts

• Standard accounts may have slightly slower execution speeds and potentially higher slippage compared to Raw accounts.
• This is because Standard accounts do not have the same direct access to the interbank market and may rely on the broker's internal liquidity providers.

Leverage and Margin Requirements

The leverage and margin requirements for Raw and Standard accounts can also vary.

Raw Accounts

• Raw accounts may offer higher leverage options, allowing traders to increase their exposure to the market.
• The margin requirements for Raw accounts may be more stringent, as the tighter spreads and higher trading costs can increase the overall risk of the trading environment.

Standard Accounts

• Standard accounts may have lower leverage options, which can be more suitable for traders who are new to the market or have a lower risk tolerance.
• The margin requirements for Standard accounts may be more relaxed, as the wider spreads and lower trading costs can reduce the overall risk of the trading environment.

Available Instruments and Platforms

The range of available instruments and trading platforms can also differ between Raw and Standard accounts.

Raw Accounts

• Raw accounts may offer access to a broader range of financial instruments, including exotic currency pairs, commodities, and more sophisticated derivatives.
• The trading platforms available for Raw accounts may be more advanced and catered towards the needs of professional traders, with features such as algorithmic trading capabilities and advanced charting tools.

Standard Accounts

• Standard accounts may have a more limited selection of financial instruments, focusing on the more commonly traded assets like major currency pairs and popular commodities.
• The trading platforms for Standard accounts may be more user-friendly and accessible for beginner and intermediate traders, with a focus on simplicity and ease of use.

Suitability for Different Traders

The suitability of Raw and Standard accounts can vary depending on the trader's experience, trading style, and investment goals.

Raw Accounts

• Raw accounts are typically more suitable for experienced traders, professional traders, and those who engage in high-frequency trading strategies.
• Traders who prioritize competitive pricing, tight spreads, and low trading costs may find Raw accounts to be the more appropriate choice.
• Raw accounts may be less suitable for beginner traders or those with a lower risk tolerance, as the higher trading costs and more stringent margin requirements can increase the overall risk of the trading environment.

Standard Accounts

• Standard accounts are generally more suitable for a wider range of traders, including beginners and those with moderate trading experience.
• Traders who value accessibility, lower minimum deposit requirements, and more relaxed margin requirements may find Standard accounts to be a better fit.
• Standard accounts may be less suitable for traders who prioritize the tightest possible spreads and the lowest trading costs, as the wider spreads and potentially higher trading costs can be a trade-off for the more accessible features.

Conclusion: Choosing the Right Account for Your Needs

In conclusion, the choice between a Raw or Standard account at FP Markets ultimately depends on the individual trader's needs, experience, trading style, and investment goals. Experienced traders who prioritize competitive pricing, tight spreads, and low trading costs may find the Raw account to be the more suitable option. In contrast, beginner traders or those with a lower risk tolerance may find the Standard account to be a more accessible and suitable choice.

Ultimately, it is essential for traders to carefully evaluate their own trading requirements, risk profile, and investment objectives before deciding on the appropriate account type. By understanding the key differences between Raw and Standard accounts, traders can make an informed decision and select the account that best aligns with their trading needs and preferences.

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