Monday, July 27, 2009
Cost of Opening Trades
Do you think opening and closing Forex Trades are painless? Well, I mean you can just click on Buy or Sell, enter the amount in units or lots, and then enter stop loss or take profit values and then click SUBMIT, right? It doesn’t cost you a dime.
Well, think again. When you click submit, you will have lost money in the form of spread. If you take notice, you would realize that there is a buy and sell price for every market pair. So if you Buy, the broker opens your trade at the buy price and the difference between the Buy and Sell prices would be the spread. That difference costs you money and that is what you will be paying to the broker!
So generally, if you scalp a lot, you will be paying the spread many times to the broker in a day. But if you play position trades or daily trades, or do not open and close trades that frequently, you do not need to spend as much money trading.
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