Two traders take the same setup on the same day and the same pair. One ends the month ahead, the other breaks even. The difference is rarely the entries — it is what each trade costs to run. Spread, commission and swap are small enough to ignore on any single trade and large enough to decide a whole month. Here is how to see all three clearly.
The spread is the gap between the buy price and the sell price, and you cross it on every entry. On a typical retail EURUSD quote of about one pip, a 0.10-lot trade starts life roughly $1 down. That is the toll. It is small on purpose — but it is charged thousands of times.
Spreads are not constant. They widen when liquidity thins: right at the daily rollover, around major data releases, and in the last hours of Friday. A strategy tested on calm afternoon spreads will behave differently if it actually trades at 23:30. Trade when your spread assumption is actually true.
Some accounts charge no spread markup and a visible commission instead — commonly around $7 per standard lot round trip. A 0.10-lot trade carries roughly $0.70. Raw-spread accounts often end up cheaper overall, but only if you actually compare spread plus commission as one number.
| Cost item — 0.10 lots EURUSD | Amount |
|---|---|
| Spread paid once at entry (1 pip) | $1.00 |
| Commission, round trip | $0.70 |
| Total cost before swap | $1.70 |
Now weigh that against the target. A trade aiming for 10 pips ($10) pays 1.70 — that is 17% of the prize gone before the outcome is decided. A trade aiming for 100 pips ($100) pays the same 1.70 — under 2%. Identical costs, completely different businesses.
A strategy that wins 10 pips and pays 1.7 is a different business from one that wins 100 and pays 1.7.
Scalping-style targets are not wrong, but they must be tested against real costs, not ideal ones. If your average winner is only a few times larger than your total cost, small spread changes can flip the whole system from profitable to losing.
Hold a position past the daily rollover and you pay or earn swap — the interest differential between the two currencies, applied to your position. On popular pairs it is often small and sometimes even in your favor, but it is never random: it is published daily by your broker, it can run several pips per night on some pairs, and on Wednesdays it is usually charged at triple rate to cover the weekend. A swing trade held five nights can quietly carry a cost (or a rebate) worth more than the entry spread.
Direction matters too — longs and shorts on the same pair can face opposite swap signs. Before holding anything overnight, look the pair up in your platform rather than guessing.
Three habits keep costs honest:
Costs belong next to risk in every plan — the position size calculator handles the risk side, and if a trade needs margin room to survive the week, the margin calculator shows what holding it really requires. Cheap trades are not found; they are designed.
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