[Basics] [Basics] Hidden costs: spread, commission, swap, slippage

The most common reason an EA that made money in backtests fails on a live account is costs. The more often you trade, the more costs eat your profit.

1. Spread

• The gap between the buy (Ask) and sell (Bid) price. Every trade starts in the red by this much
• Gold's spread is usually small but widens several times at session close/open, news releases and rollover (around the broker's midnight)
• The smaller your target per trade (e.g. scalping), the more it hurts

2. Commission

• ECN/RAW accounts have tight spreads but charge a commission per lot
• Compare brokers on spread + commission combined

3. Swap (overnight interest)

• Charged when you hold past the broker server's midnight; you pay or receive depending on direction
• Wednesday night often charges 3 days at once (for the weekend)
• Grid and averaging-down strategies that hold for days or weeks pile up large swaps

4. Slippage

• The difference between the price you ordered and the price you got
• During fast news moves, stop orders can fill much worse than expected
• In copy trading, fill differences between the master and your account become profit differences

How to check your costs

• Add up the commission and swap columns in MT5 Toolbox → History
• If costs exceed 30% of monthly net profit, fix the cost structure before the strategy