ForexFin
ForexFin
How much your broker's bid–ask spread actually costs you per trade, per day, and per year.
On EUR/USD, a 1.0-pip spread costs $10.00 per standard-lot round-trip for a USD account. Five round-trips a day across 21 trading days is $1,050 a month — about $12,600 a year handed to the broker before any directional profit or loss. Tighter spreads and fewer trades both cut it linearly; it is the single biggest cost lever a scalper controls.
Every time you open and close a trade you cross the bid–ask spread once. If a broker quotes EUR/USD at 1.10005 / 1.10015, the spread is 1 pip. Buying at the ask and selling later at the bid means you start every position 1 pip in the red — independent of where the market goes.
For 1 standard lot of EUR/USD, 1 pip is roughly 10 USD. Trade five times a day, 21 days a month: that's 1 × 10 × 5 × 21 = 1,050 USD a month given to the broker before you've made or lost a single directional trade. That's why a wide spread weighs most on strategies that trade often.
We start from the pair's pip value in your account currency (using European Central Bank reference rates for cross-currency conversion), multiply by the spread you specified, and then by the number of round-trip trades you do. The yearly figure is a simple 12 × monthly; if you take holidays it'll be lower.
cost per round trip = spread (pips) × pip value per lot × lots
When the quote currency isn't your account currency, the pip value is converted first. 0.30 lots of GBP/JPY with a 2.5-pip spread, in a dollar account with USD/JPY at 150.00: one pip is ¥1,000 per lot, or $6.67, so the round trip costs 2.5 × $6.67 × 0.30 = $5.00.
It depends on the pair and on your stop. On EUR/USD in a dollar account, a 0.6-pip spread costs $6 per standard lot round trip and $0.06 per micro lot; a 1-pip spread costs $10 and $0.10. What matters more is the spread as a share of your stop: 1 pip on a 10-pip stop is 10% of the risk before the trade moves, on a 50-pip stop it is 2%. Short-stop and high-frequency strategies need the tightest pricing; swing trades barely feel the difference.
To compare account types, turn the commission into pips. On EUR/USD a commission of $7 per lot round trip is 0.7 pips (at $10 a pip). A raw account at 0.1 pips plus that commission costs 0.8 pips; a spread-only account at 1.0 pips costs 1.0. Enter the all-in figure (0.8 here) as the spread and the calculator shows the full cost per trade, day, month and year. Commission levels vary by broker; these are round examples.
On a competitive ECN broker EUR/USD often trades at 0.1–0.5 pips during the London & New York overlap, widening to 1–2 pips overnight. Standard market-maker brokers usually quote a fixed 1–2 pip spread.
No. Many brokers charge a separate per-lot commission and a tighter spread (sometimes called “raw spread” accounts). To see your true cost per trade, add the commission to the spread cost this calculator outputs.
Liquidity is lower outside the major sessions. With fewer market-makers competing, the bid–ask gap widens. See our Forex Market Hours page for the high-volume windows when spreads are typically tightest.
Around the daily rollover (about 17:00 New York), at the Sunday open, and in the minutes around major data releases and central-bank decisions. Pending orders filled then pay the wider spread.
Spread is deterministic — you always pay it on entry. Slippage is the additional adverse fill you sometimes get during fast moves or news. Together they're called execution cost. Many retail strategies look profitable on a spreadless backtest but die when execution cost is included.
Use our pip value calculator to see what 1 pip is worth in your account currency, and the position size calculator to size trades to your risk tolerance.
ForexFin's analytics work on your trade history: import MT4/MT5 by CSV, score every trade that has a stop in R, and see which setups, pairs and sessions carry your results. The journal is free; Trader adds behaviour flags and written retrospectives.