forex trading cost

How Much Does Forex Trading Cost?

It can be hard to determine how much forex trading costs since the price varies from broker to broker. Most websites inform you of the cost before you sign up for an account and begin participating in forex trading. There are two ways that brokers are paid when trading. The first is a commission price directly from exchanging a certain amount of money. The second is determined by taking the difference in the spread or the remaining amount between the bid and asking price.

Commission costs are usually low and easy to read, even if you’re a beginner. For example, if you decided to trade with FXCM, you should expect to pay $.04 per 1k lot. If the currency you're trading is 1k, then you’ll pay $.04 in commission. If your lot is 10,000, then you’ll pay $.40 in commission.

Additionally, forex brokers make money through the spread difference. For example, if you choose to trade Euros for US Dollars, you may see -1.4952 -1.4955. The bid price is -1.4955, while the next number represents the asking price. The difference remaining is three pips, which the broker takes as commission. These two methods of charging clients are the way brokers make their money.

Last Updated: August 05, 2016

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