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💸 The True Cost of Swap, Spread, and Commission

7 November 2025, 07:38

Issam Kassas

💸 The True Cost of Swap, Spread, and Commission

🎯 The Lesson

Most traders lose money quietly — not from bad entries, but from hidden costs.
Spread, swap, and commission slowly eat your profits trade by trade.
Ignore them, and even a winning strategy can turn negative over time.

⚙️ 1️⃣ Spread — The Silent Entry Tax

Spread = the difference between bid and ask prices.
You pay it every time you open a trade.

Example:

EUR/USD spread: 1.5 pips
Position: 1 lot → $10 per pip
→ Cost = $15 instantly when you enter.

If you trade 50 times a week → $15 × 50 = $750 in spread cost.
That’s 7.5% of a $10,000 account — gone.

🧠 Tip: Trade during high-liquidity sessions (London/New York overlap) when spreads are tight.

⚙️ 2️⃣ Swap — The Overnight Interest Trap

Swap = fee for holding a position overnight.
You pay (or sometimes earn) interest depending on the difference between the two currencies’ rates.

Example:

EUR/USD long position → –$6.50 per lot per night
5 nights open = –$32.50 loss

Hold that trade for a month, and it’s –$130 just from swap.
That’s why swing traders must check swap tables before holding long-term positions.

🧠 Tip: Choose low-swap pairs (e.g. USD/JPY, EUR/CHF) or use swap-free accounts if available.

⚙️ 3️⃣ Commissions — The Cost of Precision

ECN brokers often charge a small fee per lot traded.
Example:

$7 round-trip commission per lot
100 trades per month = $700 in fees

If your monthly profit target is $1,000 —
you’ve already given away 70% of it before spreads or swaps even start.

🧠 Tip:
Only use ECN accounts if your strategy truly benefits from tight spreads and fast execution.
Otherwise, standard accounts can save money over time.