I’m trying to compare standard (no commission) STP vs spread (commission) ECN accounts in terms of costs.
I’ve seen discussion on how using low lots can be cheaper with standard accounts despite having wider spread (depending on how many pips are added) while raw spread accounts can be cheaper when using more lots. I understand and am OK with this and how to calculate it.
I asked a broker which types of clients prefer standard as opposed to commission based accounts and was advised the following
“Choosing one account over the other depends on your trading style and your preference to having no commissions or tighter spreads. Generally, people that hold positions for shorter time frames (scalpers) prefer to have tighter spreads and will choose the TRUE ECN accounts. This is different to people that like to hold for longer time frames as they do not worry about the spread as much and will choose Standard setting as they would rather have no commissions. In the end, depends on whichever the trader is comfortable with.”
I’m trying to understand the connection between the account preference type and time frame (shorter or longer) in terms pure costs/expenses. Ive already explained I understand the commission costs and I appreciate" no commission" is simple to calculate so are they suggesting that those that prefer short time frames with narrower spreads (such as EAs) are exiting the market each day to avoid swap or overnight costs or simply trade in higher lots?