Forex trading costs: spread, commission and swap explained

Three costs on every account

Every trade pays the spread: the gap between the buy and sell price. Some accounts add a commission per lot. Positions held overnight pay or receive a swap. Which of these matters most depends on how often you trade and how long you hold.

Standard vs raw-spread accounts

Brokers usually offer two kinds of account:

• Standard: wider spreads, no commission. Simple to understand; the whole cost is in the price.
• Raw spread or ECN: spreads close to the market plus a fixed commission per lot, often quoted per side (opening and closing are charged separately).

To compare them, turn both into the same unit: the cost of one round trip of one lot. Spread in pips × pip value per lot gives the spread cost; add the round-turn commission for the raw account. The pip value calculator gives the pip value for your instrument and account currency.

Swaps

A swap is the overnight financing charge or credit, set by the broker for each instrument and direction, and often tripled once a week to cover the weekend. Swap-free (Islamic) accounts replace it with other fees or limits; see our guide on swap-free accounts.

Costs outside the trade

• Currency conversion: if your account currency differs from your deposit currency, the conversion rate and fee apply both ways.
• Deposits and withdrawals: some methods are free, others charge a fixed or percentage fee; our reviews list the published fees per method.
• Inactivity fees: some brokers charge dormant accounts.

A quick comparison routine

1. Pick the instrument you trade most and its typical spread on each account.
2. Convert spread and commission into a cost per lot round trip.
3. Multiply by the lots you trade in a month.
4. Add expected swaps for your usual holding time.

The margin and profit-and-loss calculators help you check the rest of the numbers before you trade.