Commission is a fixed fee some brokers charge per trade, usually per standard lot and often split across entry and exit. It appears on raw-spread and ECN accounts that offer very tight spreads in exchange for the separate fee. Spread-only accounts simply fold the broker's cut into a wider spread instead.
Key takeaways
- Total trading cost = spread + commission + any overnight swap - always compare accounts on the combined round-trip figure.
- Raw/ECN accounts pair tight spreads with a per-lot commission and are often cheaper for active traders; spread-only accounts are simpler.
- Costs hurt thin edges most - always judge a strategy on net results after costs, never gross.
The two account models
- Spread-only - no separate commission; the broker's fee is baked into a slightly wider spread. Simpler to reason about.
- Commission (raw / ECN) - very tight spreads plus a fixed commission per lot. Often cheaper overall for active traders.
To compare fairly, add the spread cost and the commission together into one round-trip cost per trade.
Swap fees on overnight trades
Hold a position past the daily rollover and you pay or receive a swap - an interest adjustment based on the rate difference between the two currencies in the pair. It is irrelevant to intraday traders but adds up for swing and position traders holding for days or weeks.
Why costs decide thin edges
Every cost is a fixed toll, so it hurts most when your average win is small. A strategy with a razor-thin edge can be profitable before costs and a loser after them. This is exactly why realistic testing matters and why ignoring costs is one of the classic backtesting mistakes.
Important: when you evaluate a strategy, judge it on net results after spread and commission, not gross. A gross-profitable, net-losing system is the most common way traders fool themselves with a backtest.
See costs reflected in your results
FxBacktest applies trading costs on your simulated trades, so the numbers in your session report are net, not idealized. Testing this way means the expectancy you see already survives its costs - the only version of an edge that is worth risking real money on.
Spread is the other half of the same bill, and it is usually the larger half. What spreads really cost measures it across 25 instruments and annualises it - one standard lot of EUR/USD traded five times a week costs about $1,170 a year in spread alone.
Forex commission FAQ
How does forex commission work?
A fixed fee per trade, usually per standard lot and often split across entry and exit. It appears on raw-spread and ECN accounts; spread-only accounts fold it into a wider spread.
Is a commission account cheaper than a spread-only account?
It depends on your style. Raw-spread plus commission is often cheaper for active traders; spread-only is simpler. Add spread and commission for the true round-trip cost.
What is a swap fee in forex?
An interest adjustment charged or paid for holding a position overnight, based on the rate difference between the two currencies. It mainly affects swing and position traders.
How do I calculate the total cost of a forex trade?
Add the spread, the round-trip commission, and any overnight swap into one figure. Roughly: a 1-pip spread (~$10/lot) plus ~$7 round-trip commission is about $17 before swaps. Compare that combined number across accounts.