Spreads and commissions are the main costs of forex trading. Understanding them helps you keep more of your profits.
What Is the Spread?
The spread is the gap between the buy and sell price of a currency pair. A tighter spread means lower trading costs.
Fixed vs Variable Spreads
Fixed spreads stay constant, while variable spreads change with market conditions and can widen during news events.
Commission-Based Accounts
Some accounts, especially ECN accounts, offer very tight raw spreads but charge a separate commission per trade. This model is often preferred by active traders.
Which Is Cheaper?
It depends on your style. Frequent traders often benefit from raw spread plus commission, while casual traders may prefer a simple all-in spread.
Watch for Hidden Costs
Beyond spreads and commissions, check for swap fees, inactivity fees and withdrawal charges before choosing a broker.