abdulla1 Posted June 11, 2011 Share Posted June 11, 2011 You may have relatives or friends who trade the markets. They could be trading shares, futures, options or forex. You may have heard of their exciting trading stories and perhaps this aroused your curiosity and you wondered whether you should trade too. One of the first questions you ask before you trade would be: what are the costs of trading. The costs of trading depend on several factors, including the instrument and market you are trading. Most of the costs you pay are to your brokerage firm. They need to make a living in exchange for the services they provide. Generally, you would expect to incur the following costs: Commissions Slippage Spread Platform Fees Expenses Commissions These costs are charged by brokers. The commission you pay is usually calculated as a percentage of the size of your trade. For example, if you are buying or selling $10,000 worth of shares, your broker may charge you 1% of that. They may also charge in tiers: for example, if you are buying or selling shares with a total market value of less than $10,000 then your broker may charge you $30. If it is under $20,000, they may charge you $50. Therefore, if you bought $5,000 worth of shares, you would still pay $30 commission. And if you bought $12,000 worth of shares you would still pay $50 commission. Slippage The price of a commodity is always moving as long as the market is open. Therefore, if the price of a share is quoted at $10 now, it does not mean that when you decide to buy, you will buy those shares at $10 each. When you put in your order and it gets filled, the market price may have already changed. If your order to buy the shares was filled at a price of $10.25, and you bought 100 shares, then your total slippage cost is: $25 (that is 100 shares * $0.25). If you had the same slippage when you sell, then the entire slippage costs for you getting in and out of the market would be $50 (that is $25 * 2 trades). Spread The spread is the difference between the bid to buy and offer to sell for the commodity. If the most eager buyer is willing to buy US Dollars for 0.7500 Australian Dollars each, but the most eager seller is only willing to sell them for 0.7510 Australian Dollars each, then there is a spread of 10 pips. These 10 pips are referred to as the spread. If you bought 100,000 USDs, the spread would cost you 100 Australian Dollars. (Pips are discussed further in the book: The Part-Time Currency Trader .) Platform Fees Some brokers charge you monthly for using their trading platforms. Expenses These costs include those associated to your trading education like buying books, trading software, data subscription and so forth. Some people may 'brush' these costs aside as negligible costs of having fun, much like the coins they put in poker machines. However, if you want to look at trading as a business, you have to minimize them and make sure you are getting the most for every dollar you spend to ensure your long-term survival. by Marquez Comelab Quote Link to comment Share on other sites More sharing options...
shoaybkhan Posted July 29, 2013 Share Posted July 29, 2013 As of today, these costs have come down to roughly 2.5%. Counter party risk has been eliminated on NSE since the clearing corporation gives a guarantee on every trade (if your counter party defaults, then the clearing corporation steps in and fulfills his obligations). Brokerage fees have come down, impact cost has come down, but the risk of stolen or counterfeit certificates has actually doubled. Quote Link to comment Share on other sites More sharing options...
Thayungsta Posted October 11, 2013 Share Posted October 11, 2013 no doubt it is truly a real rescure formate Quote Link to comment Share on other sites More sharing options...
Thayungsta Posted October 11, 2013 Share Posted October 11, 2013 pay attention to the formate source Quote Link to comment Share on other sites More sharing options...
Thayungsta Posted October 11, 2013 Share Posted October 11, 2013 pay attention to the formate source Quote Link to comment Share on other sites More sharing options...
surya77 Posted February 8, 2014 Share Posted February 8, 2014 may the cost you must pay in forex trading to become succes is loss of you money! but is not problesm for you . becasue if we have build stron knowledge and education in forex trading we can step in next level to become success. Quote Link to comment Share on other sites More sharing options...
budado Posted July 8, 2014 Share Posted July 8, 2014 If you really want to start in forex trading its best if you start it with free bonus funds. I started this way and slowly grow my trading account. Its very hard to make big in forex trading but I do know that slowly but surely some how we can build our trading account and before we know it we already making big in forex trading. So make sure that we know what we are doing before we trade in forex to save our investments. Quote Link to comment Share on other sites More sharing options...
Aftabansari142 Posted November 1, 2014 Share Posted November 1, 2014 Thanks such a nice post which is guide and suport the people Quote Link to comment Share on other sites More sharing options...
myregister Posted November 4, 2014 Share Posted November 4, 2014 Cost of trading which is more make a sense is spreads. STP-kind of broker always use higher spreads so they can more profit but usually in normal range. Comission also the cost of trading but we can find this thing only in ECN-type broker and sometimes DMA broker. Quote Link to comment Share on other sites More sharing options...
pepy Posted December 20, 2015 Share Posted December 20, 2015 may the cost you must pay in forex trading to become succes is loss of you money! but is not problesm for you . becasue if we have build stron knowledge and education in forex trading we can step in next level to become success. Overall forex cost isn't as big as the other business since it use internet and also with margin we can trade less and earn more only if we can manage the risk well. Loss of money is another cost but i assure you as long as you want to learn that cost would benefit you greatly and will build your knowledge stronger. Quote Link to comment Share on other sites More sharing options...
myregister Posted January 12, 2016 Share Posted January 12, 2016 may the cost you must pay in forex trading to become succes is loss of you money! but is not problesm for you . becasue if we have build stron knowledge and education in forex trading we can step in next level to become success. Cost is loss but it is a cost not loss i mean it is something you must pay that later will give you more than what you pay. If you loss means you pay something but cannot recover from it. Cost of trading comes up with many things but the most prominent example of course Spread, which many people concern especially for scalpers. Quote Link to comment Share on other sites More sharing options...
pepy Posted February 6, 2016 Share Posted February 6, 2016 Well i am truly confused with what you said but i think i get the glimpse. Well cost of trading come from many factors like spread or comission, your loss, your time that you spend and so on. Loss is a cost you must bear, and profit is what you earn so it is simple. You must earn much more than you lose, much more than the time you spend on forex + spread/comission. Simple isn't it? and you don't have beat around the bush. Quote Link to comment Share on other sites More sharing options...
myregister Posted February 27, 2016 Share Posted February 27, 2016 I don't beat around the bush just want to tell what is my point. Well, cost of trading is exist not just loss but also the cost before we trade like spread, that is cost. Also if you are utilarian type person then your time is cost the more time you spend means more cost and that isn't good if you earn less than what cost you spend from time perspective and money perspective. Quote Link to comment Share on other sites More sharing options...
pepy Posted March 26, 2016 Share Posted March 26, 2016 Of course exist if that won't exist your trading won't be have something like comission or spreads. That is the cost of trading. It is fact and undeniable. The cost usually various to each traders but the more you trade the more cost, also swap is also cost. Quote Link to comment Share on other sites More sharing options...
myregister Posted April 18, 2016 Share Posted April 18, 2016 Not just from those, the cost of trading is time, you know how much time you spend in forex? If forex is only your life then that is not a big deal, but imagine you spend more efforts but your earning isn't as much as your effort or even you lose. Time is also invisible cost in forex trading but most traders don't pay attention to. Quote Link to comment Share on other sites More sharing options...
pepy Posted May 8, 2016 Share Posted May 8, 2016 @myregister Yes i think that is totally true, not just money but also time, i know this won't be included by some people but from my own perspective time is important thing for people but sometimes overlooked, aside from spread many traders usually doesn't even care about what is the other cost they should bear. Quote Link to comment Share on other sites More sharing options...
myregister Posted May 19, 2016 Share Posted May 19, 2016 Yes, i know about that very well. The cost is not just about money but time, but if you earn a lot of money it sure compensate your time if you think your time once again. This is why many scalpers think hard about their spread, i mean how much it about. That is cost just like other people think. Quote Link to comment Share on other sites More sharing options...
Vaabum Posted April 22, 2022 Share Posted April 22, 2022 It is important to understand that such an option can actually be quite interesting. At least that's what I've been looking into. Quote Link to comment Share on other sites More sharing options...
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