PRACTICAL GUIDE
Explained concepts, worked cases and practice to test your understanding. Numerical examples are hypothetical; replace assumptions with your instrument specifications.
The essentials
A useful comparison combines monetized spread, opening and closing commissions, funding and conversion. Fix instrument, size, entity, platform and holding period. Mark unsupported entries as unknown rather than treating them as zero.
Understand the mechanism, not just the definition
Hold pair, volume and period constant and use consistent units. A per-million fee cannot be added directly to a per-lot fee, and point-based swaps require conversion. When results use executed bid and ask prices, spread is already reflected in price; subtracting it again double-counts it.
Example and verification
Hypothetical example: a 1.2-pip spread at USD 10 per pip costs USD 12; USD 3 commission per side adds USD 6. The initial total is USD 18 plus funding and other charges. Use the same currency throughout.
Worked case, step by step
For a hypothetical pre-trade estimate at 0.10 lot EUR/USD, assume USD 1 per pip, a 1.2-pip spread and USD 3 commission per lot per side. Estimated spread costs USD 1.20 and commissions USD 0.60: USD 1.80 round-trip. Adding USD 0.10 funding gives USD 1.90. Keep each input’s source and reconcile with history without double-counting price-embedded costs.
1.20 + 0.60 + 0.10 = 1.90 USDWhat to verify when applying this
Enter your data in the calculator and retain each input's source. In history, distinguish gross and net results. Do not compare one broker's advertised minimum with another's realized cost without explaining the difference.
Practice: verify it in your environment
Learn by observing the process and keeping its data. Complete this practice in demo or using documentation, without sending real orders or adding capital for the exercise. Record differences between the example and your account specifications.
- Define a scenario and normalize units to one currency.
- Separate pre-trade estimates and recorded costs; document differences and causes.
Test your understanding
Try the question before revealing the answer. Justify the conclusion and its assumptions rather than memorizing a number.
How should an undocumented commission amount be treated?
Reveal the explained answer
As unknown, not zero. The comparison remains incomplete until clarified.
Sources for further learning
Consult original documentation to check units, features and terms. Your account specifications take precedence over examples in this guide.
