Broker Spreads and Fees
Every trade has costs. Understanding them is crucial for profitability.
What is the Spread?
- Difference between Bid and Ask price
- The broker profit
- You start trade down by spread
Types of Spreads
Fixed Spreads
- Stay constant mostly
- Predictable costs
Variable Spreads
- Change with market conditions
- Tight during active hours
- Widen during news
Typical Spreads
Major Pairs
- EUR/USD: 0.5-2 pips
- GBP/USD: 1-3 pips
Exotic Pairs
- USD/TRY: 50-200 pips
- Much higher costs
Swap Fees
- Interest for holding overnight
- Can be positive or negative
- Triple swap Wednesday
Reducing Costs
- Trade major pairs
- Trade during active hours
- Avoid holding during news
- Compare broker spreads