Understanding Scalping Costs
Scalping is a high-volume trading strategy that aims to profit from small price movements in the market. For this strategy to be profitable, traders need to minimise transaction costs as much as possible. These costs primarily include spreads (the difference between the buy and sell price) and commissions (a fee charged per trade volume).
Both IC Markets and XM are well-known global brokers, but their pricing models and target markets can differ significantly, especially for scalpers. We will examine their typical offerings in detail.
IC Markets: A Scalper's Favourite?
IC Markets, an Australian-based broker with a strong global presence, is often touted as a preferred choice for scalpers due to its competitive pricing structure, particularly on its Raw Spread accounts. These accounts are designed to offer institutional-grade spreads by charging a small, fixed commission per lot traded instead of widening the spread.
Key features for scalpers with IC Markets:
* Raw Spreads: Often as low as 0.0 pips on major pairs like EUR/USD.
* Low Commissions: Typically around $3.50 per standard lot per side on Raw Spread accounts.
* Deep Liquidity: Access to multiple liquidity providers, which helps maintain tight spreads even during volatile periods.
* Fast Execution: Utilisation of fibre optic networks to facilitate rapid order execution.
* No Restrictions: Generally allows all trading strategies, including scalping, without minimum trade duration requirements.
XM: Competitive but Different?
XM is a global online broker with a diverse range of account types. While not traditionally known as a "raw spread" broker in the same vein as IC Markets, XM has introduced accounts with tighter spreads, particularly its XM Ultra Low Account. However, XM's primary offering often involves wider spreads with zero commissions, which may or may not be beneficial for scalpers depending on their volume and specific instruments traded.
Key features for scalpers with XM:
* XM Ultra Low Account: Offers lower spreads compared to its standard accounts, often with zero commissions.
* Execution Policy: Emphasises no re-quotes and fast execution.
* Micro Account: Useful for testing strategies with very small trade sizes.
* Fixed Spreads: Available on some account types, which can be beneficial during news events but might be higher overall.
IC Markets vs XM: Direct Comparison
Here’s a head-to-head comparison focusing on metrics crucial for scalping:
| Feature | IC Markets (Raw Spread Account) | XM (XM Ultra Low Account) |
| :------------------ | :------------------------------ | :------------------------ |
| Spreads (EUR/USD) | Typical 0.0 – 0.1 pips | Typical 0.6 – 1.0 pips |
| Spreads (GBP/USD) | Typical 0.3 – 0.5 pips | Typical 1.0 – 1.5 pips |
| Spreads (XAU/USD) | Typical 10 – 15 cents | Typical 15 – 25 cents |
| Commission (per standard lot per side) | $3.50 (cTrader: $3.00) | $0.00 |
| Min. Deposit | $200 | $50 (Standard/Micro) / $5 (Ultra Low) |
| Regulators | ASIC, CySEC, FSA (Seychelles) | CySEC, FSC, DFSA, etc. |
| Platforms | MetaTrader 4, MetaTrader 5, cTrader | MetaTrader 4, MetaTrader 5 |
*Figures are typical, at time of writing — check broker site for current pricing.*
Note on Commission: For IC Markets, a $3.50 commission per side means a total of $7.00 per round turn lot. When calculating total cost, scalpers must add this to the spread. For XM Ultra Low, the spread *is* the cost.
Verdict by Trader Type
For the Pure Cost-Focused Scalper:
For scalpers who prioritise the absolute lowest possible execution costs on major forex pairs, IC Markets with its Raw Spread or cTrader accounts generally holds an edge. The ability to trade with near-zero spreads and pay a fixed, transparent commission often results in lower overall transaction costs, especially for high-volume traders. The cTrader platform, available with IC Markets, is also highly regarded for its advanced charting and ultra-fast execution capabilities, which are ideal for scalping.
For the Beginner Scalper or Those Seeking Simplicity:
XM could be a more accessible option, especially with its lower minimum deposit requirements and commission-free Ultra Low accounts. While the spreads might be slightly wider than IC Markets' raw offerings, the absence of separate commission calculations simplifies cost assessment, which can be appealing for those new to scalping or who prefer a straightforward pricing model. XM also offers a wider array of account types, potentially catering to different risk appetites and starting capital.
For Commodity Scalpers (e.g., XAU/USD):
Both brokers offer competitive pricing on XAU/USD. While IC Markets might still offer slightly tighter raw spreads, XM's commission-free model on its Ultra Low account could be attractive, depending on the typical spread offered at the time of trade. It
Next step
Open a Vantage account. CFDs carry a high risk of losing money.