5+ Forex Trading Fees Must Be Calculated by Traders For Take Profit

Although it seems small, the cost of forex trading can have a huge impact on your trading profits. Because it can erode the profits that have been made. It is important for traders to know all kinds of fees and to calculate the costs that must be incurred in forex trading. What are the costs of forex trading? Here is the list. 

1. Spreads

The spread is the value of the difference or margin between the buy (ask) and sell (bid) price of a currency between the trader and the broker. Brokers charge traders this fee for the transactions they make, and they are not charged separately, so the "spread" is the difference between the buy and sell price. For example in EUR/USD the buy price is at 1.1215 while the sell price is at 1.1212 with a difference of 3 pips, which is actually a cost to the investor. 

When buying you should be able to get a lower price at 1.1212 while when selling you can get a higher price at 1.1215 if there is no difference. But since there are spreads, the broker benefits. Just as we look for money changers, we usually look for money changers with the smallest difference in buying and selling rates. Ideally, you are looking for a forex broker with the smallest spread. Therefore, brokers that offer commission-free services are not easily tempted, because it is very likely that the fees they charge will be in the range of the spread. Always study in detail the costs we will incur. There are two types of forex spreads which are, fixed margins floating margins. 

The fixed spread remains the same even if market conditions change - be it volatile or stable - the value we agree on with the chosen broker will not be affected. For traders with small capital, a fixed spread is an option, because the average broker does not set a large fixed spread. Another advantage of trading with fixed spreads is that transaction costs are more predictable. Since the numbers are fixed, traders already know the fees they have to pay when trading. 

Meanwhile, the variable spread varies according to the bid and ask prices of currency pairs. Spreads will follow the supply and demand of currencies and market fluctuations. Because of this, the spread can be very low, and can start from 0 pips, depending on the pair and the broker it is linked to. This can be dangerous for traders. For example, when we want to buy EUR/USD with a spread of 2 pips, but when we want to press the Buy button, we don't know that the NFP report has just been released and the spread can widen quickly to 15 pips. Spreads can be very low, starting from 0 pips, depending on the currency pair and broker it is connected to. This can be dangerous for traders. 

For example, if we want to buy EUR/USD with a spread of 2 pips, but want to click the buy button, we don't know that the NFP report has just been released and the spread can quickly widen to 15 pips. Spreads are measured in pips - the smallest unit of movement in the price of a currency pair. For most currency pairs, one pip equals 0.0001.. For example, for the EUR/USD currency pair, if the bid price is 1.5735 and the ask price is 1.5737, the spread is 1.5735/37 or 2 pips. 

2. Withdrawal Fee 

Forex brokers charge a raise or deposit fee, and a withdrawal or withdrawal fee. Not all brokers charge this type of fee, but the element of this fee must be taken into account and accounted for in the trader's profit and loss. For example, at a broker, when withdrawing funds from the account, or withdrawing, the broker sets a funds withdrawal fee, which is $5 per withdrawal with a minimum withdrawal amount. The amount is quite large if the withdrawn funds are small. 

3. Inactivity Fee

There are brokers that apply a certain amount of fees if we have never logged into the platform in at least one year. The requirement to remove the inactivity fee is very easy, that is, we have to enter the application or platform and perform the activities. These fees may be intended so that merchants or consumers do not forget the app. 

4. Swaps (Overnight and Weekend Fee)

The swap is the cost of accommodation. This fee is charged to traders if they still have open orders or positions that exceed the US market closing limit. Leverage carried over to today (the next day) will be subject to a daily fee equal to the amount of the leverage. The weekend fee will be 3 times the normal day fee. For this reason, it is important for traders to know when the market opens and closes in the Asian, European and American sessions. Brokers often include a swap fee for each product. Swap charges can be both positive and negative. If it is positive, the trader will get additional value, and if it is negative, the trader has to pay.

5. Commission 

Traders need to pay broker commission fees. Commission is determined by the size of the order. Usually, a commission fee is charged per 1 lot you trade. At MIFX for example, the commission charged is $1 per 1 lot transaction. This fee is quite low, but should still be included in the calculation of the trader's net profit and loss. Even though at certain times, forex brokers often offer 0 commission promos so that traders can achieve greater profit potential. However, it is also important to note that brokers with low commissions are not necessarily, low total fees, because often brokers profit from increasing forex trading spreads. 

6. Training and Advisor Fees

Traders must learn a lot of trading knowledge either through seminars, webinars or training. Many brokers provide various trading training. Some are paid but some are free.

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