ForexFin
ForexFin
How much your broker's bid–ask spread actually costs you per trade, per day, and per year.
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 scalping with a wide spread is brutal arithmetic.
We start from the pair's pip value in your account currency (using daily ECB 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.
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.
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.