Commission on Forex

Commission on Forex

Commission on Forex

In trading on financial markets, traders are constantly faced with the need to pay for certain services. Forex Commission is a common phenomenon. There are several types of funds collected from the trader. We will talk about them in this article.

So, the Commission on Forex includes:
* Spread (difference between Bid and Ask prices);
* Brokerage fees (for providing services to a trader);
* Swaps (Bank fees);
* Requotes (opening deals at quotes other than those for which the order was placed);
* Fees for operations with the account.

Now let's take a closer look at all the types of payments that traders make in the process.
Spread

As we mentioned above, the spread is a kind of Commission on Forex. The trader opens a trade with the difference between the Bid and Ask prices. All brokers have spreads without exception. They are divided into fixed and non-fixed.

The first ones have a certain value that doesn't change. That is, for example, the spread between the Bid and Ask of the Euro-dollar currency pair is 3 points. Accordingly, it does not change during your trade.

Such a Commission on Forex as a non-fixed spread differs in that the value constantly varies depending on the situation. If a fixed spread value is an artificial invention of brokers, an unfixed spread is a manifestation of the market.

In fact, no broker can provide a fixed spread value without working to their own detriment. The unfixed spread can range from 0 to 50 points. And in quieter times, it tends to zero. During periods when important statistics are released, when market volatility increases, the Commission on Forex in the form of a spread increases significantly.
Brokerage fees

commissions for Forex transactions

Forex Commission is also charged for the company's services. Really reliable brokers that bring positions to the market, take money for their services. As an advertisement, some DCS of the kitchen type claim that they have zero commissions for Forex transactions.

But if you think about the essence of such statements, it becomes clear that the broker earns in this case on those traders who lose money. And if this is true, it means that the company benefits from having as many of its customers lose money as possible. After all, all this goes into the pocket of the broker.

Brokers charge commissions for Forex trading is most often out of the spread. That is, they put a part of their profit in each transaction. Accordingly, it is profitable for such companies that you trade and earn money.

Forex without spread and commissions is the dream of any trader, but this is simply unrealistic. Just imagine that you came, for example, to a Barber shop, and you got a free haircut. But there's a catch, isn't there? It can't be that services are provided free of charge. The same applies to Forex.

A broker is a company. It has its own staff that needs to be paid. You must also pay for various online services. From whose pocket is this done if the broker does not take commissions? The answer is obvious. Forex without commissions does not Bode well for a trader.
Swaps

Commissions for Forex transactions such as swaps are charged when a position is moved to the next trading day. A swap can be either positive or negative. Therefore, sometimes it is profitable for a trader to hold trades for as long as possible, and sometimes it is recommended not to engage in positional trading, since a currency swap can gradually "eat" all the profit.
I

Such commissions for Forex transactions as requotes are rather an attempt by the company to make money on the trader in conditions when he can not fully fulfill the promised privileges in the form of a fixed spread.

There is simply no requote for brokers offering an unfixed spread. This is not necessary. With these slips, the broker insures its risks and makes money on traders during a period of high volatility.

If a broker claims that they have a fixed spread and no slippage, don't believe it. This just can't be happening. But if the company fulfills these two points of its promises, it means that during the release of important statistics, there will be a break in communication or some other problems. But you will not be allowed to open a deal at a very favorable price for you!
Withdrawal fees

Most brokers have provided a fee-for-service withdrawal. In principle, it is also impossible without them, because otherwise, the company will have to bear these costs. And if the broker says that he does not have such commissions, then he will take money from you somewhere else.

Professional traders take commissions into account in their work. For example, knowing what the swap will be, they decide to open a long or short position and the time during which the transaction will be held.

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