Forex trading costs: the complete guide, charge by charge

Most traders know how much they win or lose, but not how much they pay. It is the one number
in trading you control almost completely — and the one almost nobody sits down and works out.

This page collects every component of cost, in the order it arises over the life of a trade.

What you pay the moment you enter

• What the spread is and where to read it — the largest
  single cost on most accounts.
• Fixed and floating spreads — how they differ, and
  which suits the way you trade.
• Calculating commission correctly — round turn or
  one way, per lot or on value.
• Adding both together for one specific trade.
• Spread markup — what the broker adds to the market
  price.

What accrues while the position is open

• Overnight financing (swap) — and why Wednesday
  night is charged three times.
• Swap on a gold position held for days — often larger
  than the spread and the rebate combined.
• Whether a swap-free account is really
  free.
• Inactivity fees — what is deducted when you
  stop trading.

Costs hidden in the price, on no invoice anywhere

• Spread widening around news — when one
  lot of gold costs eight times the normal figure.
• Slippage and requotes — why the fill differs from
  the price you saw.
• Six hidden costs few people count.
• Currency conversion costs inside a dollar-denominated
  account.
• The exchange spread on deposits and
  withdrawals — 0.5–1.5% each way, before you place a single trade.

Cost by instrument

• What one lot of gold costs — from $19 to
  over $50 depending on the broker and the hour.
• EUR/USD ·
  USD/JPY and the swap trap ·
  Index CFDs
• Scalping — how much of the profit real cost consumes.

Reducing cost: three real levers

These three move the number more than every other tip combined:

1. Choose the right account type. The difference between two types at the same broker
   is usually larger than the difference between two brokers —
   ECN or Standard and the
   cost comparison by account type.
2. Avoid the hours when spreads widen.
   12:00–15:00 UTC has the highest liquidity
   and therefore the tightest spreads.
3. Collect a rebate on the volume you were going to trade anyway. See
   how a rebate works and
   whether it worsens your spread.

The full list is in seven ways to reduce trading
costs.

Measure before optimising

Without data, every cost-reduction tip is guesswork.
Build a monthly spreadsheet with seven columns taken
straight from the MetaTrader report — add up a month and you have the real number, and most people are
surprised at how large it is.

Once you have your own figure, the
guide to choosing a broker helps you compare net
cost rather than advertised spreads.

This article is for information only and is not investment advice. Conditions and fee levels are published by the brokers and can change at any time — check with the broker you actually use. Leveraged forex and CFD trading carries a high level of risk and can cost you your entire deposit.