Forex Trading Costs: Spreads, Commissions, Slippage and Swaps
Add up spread, commission, slippage and swap per trade, and see how costs move the break even win rate for scalpers and swing traders.
Every forex trade pays some mix of four costs: the spread, commission, slippage and, if held past the daily rollover, a swap. Added together in pips, they are a fixed cost per trade, whatever the size of your target. That is why costs matter far more for scalpers than for swing traders. A 2 pip cost is small against a 120 pip target and large against a 6 pip one. This guide shows how to measure each cost and add them up per trade, with worked examples for both styles.
Key takeaways
- Cost per trade = (spread + commission in pips + slippage) × pip value × lots, plus any swap.
- Convert commission into pips for each pair. The same dollar fee is more pips on a yen pair.
- Costs raise the break even win rate. On small targets the increase can be large.
- Swaps are charged or paid at the 5pm New York rollover, often triple on Wednesday night.
What does the spread cost you?
The spread is the gap between the bid and the ask. You buy at the ask and sell at the bid, so you pay it once on every round trip.
Spread cost = spread in pips × pip value per lot × lots
Example figures: a 0.8 pip EURUSD spread on 2 lots costs 0.8 × $10 × 2 = $16. Spreads move during the day. They are usually tightest in the London and New York overlap and widest around the 5pm New York rollover and major news. Our forex trading sessions guide shows when each window falls.
Accounts come in two broad types. On a standard account, the broker builds its fee into a wider spread and charges no commission. On a raw spread account, the spread is closer to the market and a separate commission is charged. Compare them on total cost, not on spread alone.
How do commissions work?
Commission is usually quoted per standard lot, either per side or per round turn. A round turn is the opening and closing of a trade. An example $3.50 per side is $7 per round turn. Some platforms charge per million of notional instead, so check how yours works.
To compare costs across pairs, turn the commission into pips:
Commission in pips = commission per lot round turn ÷ pip value per lot
| Pair | Pip value per lot (example rates) | $7 round turn in pips |
|---|---|---|
| EURUSD | $10.00 | 0.70 |
| USDJPY at 150.00 | $6.67 | 1.05 |
| EURGBP with GBPUSD at 1.2700 | $12.70 | 0.55 |
The same $7 is half a pip more on USDJPY than on EURGBP. If you compare pairs by spread alone, you will misjudge which is cheaper to trade.
What is slippage?
Slippage is the gap between the price you expected and the price you got. It hits market orders and stop orders most, because they fill at the next available price. It can be positive as well as negative, but stops in fast markets tend to slip against you.
You cannot see slippage on a price chart, so measure it. Log the intended price and the fill price for each trade, then take the average. A trading journal makes this easy. Even a few tenths of a pip per trade adds up over hundreds of trades.
How do swaps work?
A swap, or rollover, is charged or paid on positions held past the daily rollover, usually 5pm New York time. It reflects the interest rate gap between the two currencies, plus the broker’s markup. Because of the markup, both the long and the short side can be negative on the same pair.
Many brokers charge triple swap on Wednesday night to cover the weekend. Example figures: a long swap of $8 per lot per night on 2 lots, held from Monday morning to Friday afternoon. Rollovers fall on Monday, Tuesday, Wednesday (counted three times) and Thursday nights. That is 6 nights × $8 × 2 lots = $96.
Swap rates change with interest rates, so check the current figures in your platform’s contract specification. Some prop firm accounts are swap free, while others pass swaps through. Rules vary, so check each firm.
Worked example: scalper versus swing trader
Example figures for EURUSD: a 0.8 pip spread, $7 round turn commission (0.7 pips) and 0.3 pips of average slippage. Total cost is 1.8 pips per trade. Both traders use 2 lots, so each trade costs 1.8 × $10 × 2 = $36.
| Measure | Scalper | Swing trader |
|---|---|---|
| Target and stop | 6 pips and 6 pips | 120 pips and 60 pips |
| Net win after costs | 6 minus 1.8 = 4.2 pips | 120 minus 1.8 = 118.2 pips |
| Net loss after costs | 6 + 1.8 = 7.8 pips | 60 + 1.8 = 61.8 pips |
| Break even win rate before costs | 50% | 33.3% |
| Break even win rate after costs | 7.8 ÷ 12 = 65% | 61.8 ÷ 180 = 34.3% |
Break even win rate = net loss ÷ (net win + net loss)
Costs moved the scalper’s bar from 50% to 65%. They moved the swing trader’s by one point. Now add frequency. If the scalper takes 15 trades a day, costs are 15 × $36 = $540 per day before a single pip of edge. The swing trader taking three trades a week pays $108 a week, plus swaps. Our guide to risk to reward and expectancy shows how this feeds into your expected result.
If you scalp, trade only the hours when spreads are tightest, and track your real cost per trade in your journal. A strategy that wins 60% of the time can still lose money at these costs.
How this fits prop firm rules
On a prop firm account, costs are not a side issue. Commissions and swaps are taken from your equity, so they count toward the daily loss limit, the maximum loss and the profit target.
- Daily loss limit: in the example, the scalper’s $540 of daily costs is over a fifth of an example $2,500 limit.
- Profit target: you must reach it net of costs. High trade counts make the target further away.
- Commission levels: they differ between firms and account types, which changes your break even rate.
- Strategy rules: some firms restrict certain scalping styles or very short holding times. Check before you build a plan around them.
Rules and costs vary by firm, so check each firm’s page in our forex prop firm list. You can also put firms side by side on our compare page. Then find an account in your budget.
Questions traders ask
Is a raw spread account cheaper than a standard account?
Often, for active traders, but not always. Add the average spread and the commission in pips for each account, then compare the totals for the pairs you trade.
Why is triple swap charged on Wednesday?
A spot forex trade settles two business days after it is made. The Wednesday rollover moves settlement across the weekend, so it covers three days of interest.
Can I avoid swaps?
Yes, by closing positions before the 5pm New York rollover. Some accounts are also swap free, though they may charge a different fee instead.
Trading forex carries a high risk of loss, and costs make losing strategies lose faster. Figures here are examples, not quotes from any broker or firm. Most prop firm accounts are simulated. Nothing here is financial advice.