Seven ways to cut your forex trading costs

Cost is the one variable in trading you control almost completely. You do not decide where the
market goes, but you decide what you pay to take part. Seven measures, ranked by impact.

1. Pick the right account type

The biggest and easiest saving. The gap between a suitable account type and an unsuitable one is
typically $3–4 per lot. Rough rule: high lot counts favour Raw/ECN; few, longer-held trades are
simpler on Standard.

But the conclusion only holds after the rebate, because the rate differs between
types.

2. Trade the liquid hours

The London session and its overlap with New York carry
the tightest spreads of the day. Moving the same strategy from the early Asian session into that
window can cut the spread by 30–50% with nothing else changed.

3. Stop holding overnight without a reason

Swap is the only cost that grows with time. If your strategy usually reaches its target within the
day, holding “just to be sure” adds cost without adding probability.

4. Collect a rebate on the volume you already trade

The only item on this list that asks you to change nothing. You trade exactly as before and part
of the cost comes back. At 20 lots a month and $8 a lot, that is $160 a month.

One condition: do not let it push you into trading more than the plan.

5. Use pending orders instead of market orders

A limit order lets you choose the entry and sidestep sudden spread blowouts. A
market order always fills, but at whatever
the market happens to be showing.

6. Batch deposits and withdrawals

Every deposit or withdrawal costs a currency conversion of 0.5–1.5%. Going from four a month to
one a quarter removes most of that.

7. Measure your real cost every month

Not a trick, but the thing that makes the other six mean something.
Export the statement, total spread,
commission and swap separately, and compare with
last month. You will quickly see which is largest, and that is the one to deal with first.

What not to do

Do not pick a broker purely on the lowest advertised spread. A tight spread paired with poor
execution, frequent slippage or slow withdrawals
is a bad trade. Low cost is only worth having when everything else is dependable.

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.