Account Types, Spread, Swap, and Commission

When opening a trading account, brokers usually offer different account types.
These are not different markets — they are different ways of structuring cost and risk.

1️⃣ Common Account Types

Standard Account

A standard account is the most common entry-level account.

Characteristics:

• spread is included in the price
• no separate commission
• simple to understand
  

This account is designed for:

• beginners
• casual traders
• people learning trade execution
  

You pay the cost through the spread, not a visible fee.

Cent Account

A cent account uses the same market prices, but the balance is displayed in cents instead of dollars.

Example:

• $10 becomes 1,000 cents
  

Why this matters:

• trades feel smaller
• losses look less intimidating
• risk is psychologically easier to manage
  

Cent accounts are ideal for:

• beginners transitioning from demo
• learning emotional control
• testing strategies with very small risk
  

Micro Account

A micro account allows trading with very small position sizes.

Characteristics:

• lower minimum trade size
• similar cost structure to standard accounts
  

Micro accounts are useful for:

• small capital
• cautious traders
• learning position sizing
  

(Some brokers combine micro and cent accounts — the concept is similar.)

Raw (ECN) Account

A raw account separates cost clearly.

Characteristics:

• very low spreads (sometimes near zero)
• fixed commission per trade
• faster execution
  

This account is designed for:

• active traders
• higher volume trading
• people who understand costs
  

Raw accounts are not better, just more transparent.

2️⃣ Understanding Trading Costs

Spread

The spread is the difference between the buy price and the sell price.

Example:

• Buy: 1.1002
• Sell: 1.1000
• Spread: 0.0002
  

This is the most common trading cost.

Commission

Commission is a fixed fee charged per trade.

• Common in raw accounts
• Paid when opening and/or closing a position
  

It replaces wider spreads.

Swap

Swap is an overnight holding cost or credit.

• Applied when a position stays open past a certain time
• Depends on interest rate differences
  

For beginners:

Swap only matters if you hold trades overnight.

3️⃣ Choosing the Right Account (Teaching Guidance)

For learning:

• Demo account → Cent or Micro account
  

For simplicity:

• Standard account
  

For clarity on cost:

• Raw account (after experience)
  

There is no “best” account —
only what fits your current stage.