Why Spreads Are the Primary Forex Trading Cost
The spread is the ongoing cost every forex trader pays on every trade. A EUR/USD trader at 1.5 pip average spread executing 200 standard lots annually pays $3,000 in spread costs. At 0.5 pip average, that falls to $1,000. Tighter spreads directly improve profitability for active traders.
Average EUR/USD Spreads: ECN Accounts
Among ECN/Raw accounts: Pepperstone Razor (0.09 avg), IC Markets Raw (0.10 avg), FP Markets Raw (0.10 avg). These accounts charge commissions of approximately $3.50 per side per standard lot in addition to the spread. Total round-trip cost on Pepperstone Razor: approximately $7.90 per standard lot.
Average EUR/USD Spreads: Standard Accounts
Standard spread-only accounts: IG Standard (0.60 avg), XTB Standard (0.90 avg), eToro (1.0 avg), Plus500 (0.80 avg). These accounts include no additional commission. Total round-trip cost on IG Standard: approximately $6.00 per standard lot.
Choosing Based on Your Trading Volume
For infrequent traders making fewer than 20 trades per month, standard spread-only accounts are simpler and often lower cost. For active traders executing 50+ standard lots per month, ECN accounts with tighter spreads typically deliver better economics. Calculate your breakeven point based on your specific trading frequency.