Costs for Forex Trader

The Forex market is a highly liquid market that allows you to make a profit in the short term, where you can invest even with low collateral. Already investor-friendly with its 1 to 10 leverage ratio, double-trading feature and stop-loss orders, forex has a loyal investor base by minimizing the costs of investors who want to invest. As is known, forex market trading platforms are free. The investor can start investment transactions by downloading this platform to his computer or mobile device. But before that, trial accounts accessed by the brokerage house and even certain forex trainings are also free.

In addition to these applications that make it easier for the investor to start transactions, there are also low forex costs. Although these costs are not a burden for the investor, it is useful to be aware of them. Let’s take a look at the spread and swap costs that the Forex trader will face during the transaction.

Swap Costs for Forex

The overnight carrying cost reflected in your account as plus or minus according to the interest difference between the currency pairs you have invested in is a swap. In other words, if you have decided to implement the idea of ​​putting the high-interest one of the two currencies to the market and keeping the low-interest one, it means that the overnight carrying cost of the low-interest money will be reflected in your account. Swap fees are valid for overnight transactions, transactions that are not closed on the same day and transferred to another day. Forex market investors who do not accept the overnight carrying cost can open a swap-free forex account. This option is generally preferred by investors who want to stay away from interest.

Spreads

“The spread, which is the forex term that expresses the difference between the buying price and the selling price of an exchange rate, is shown between forex costs. Yes, there are no commissions in forex transactions. However, the difference between the buying-selling price that the investor pays while making the transaction, is called the spread as the transaction cost. When a new transaction is entered in the Forex market, it starts with a loss equal to the spread. Sperad does not have a specific ratio. Rates differ according to liquidity. However, some brokerage houses also use fixed spreads in their investment products. It is important to work with brokerage firms with low spreads in your Forex investments. Because brokerage houses that offer low spreads allow you to trade with low spreads and reduce your costs.

SEE ALSO; What is a lot in forex? How is Lot Calculated?

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