hidden costs
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Thread: hidden costs

  1. #1
    Join Date
    Nov 2006
    Posts
    6

    Default hidden costs

    Does anyone know what other costs that might be incurred once an account has been opened. I know there are many accounts around , I was just looking for any info possible.

    Thank You
    md41904

  2. #2
    Join Date
    Dec 2006
    Posts
    440
    the only cost is in the spread, normally around 3 pips for the eur/usd, normally that is it with most major fx brokers, charts are normally free and some analyst info.

    In this competative forex broker market there is little need to pay them anything other then the spread, if they say they want to charge you for something ... and you don`t need it then dont go with it

  3. #3
    Join Date
    Dec 2006
    Posts
    99
    Quote Originally Posted by n_aftab View Post
    In this competative forex broker market there is little need to pay them anything other then the spread, if they say they want to charge you for something ... and you don`t need it then dont go with it
    i have to agree. there is little you should be paying for. dont learn this lesson the hard way. if you are a newbie then there is no excuse for you to be paying anything more then the spread and the cost for the wire transfer. with experience and success comes room to be able to go for the most sophisticated tools. you really dont need them early on. just when you have already established yourself and want to step up your game.

    fxstreet and Forex Factory has a good list of some of the best brokers that you can compare. they all have their strengths and weaknesses. in the baby pips lessons and on fxstreet there is a walkthrough of key things to look at when pick a good broker. follow them and thats really all you need to worry about.
    Last edited by honeb; 12-19-2006 at 04:45 PM.

  4. #4
    Join Date
    Dec 2006
    Location
    Norristown, PA
    Posts
    450
    Oanda Rules 1.5 pip for EUR/USD. I love the low spreads but mostly love the unlimited game/demo platform for practicing

    [QUOTE=n_aftab;1289]the only cost is in the spread, normally around 3 pips for the eur/usd, normally that is it with most major fx brokers, charts are normally free and some analyst info.

  5. #5
    As well as all the regular retail trading desk brokers out there (FXCM, FX Solutions, forex.com, etc.) it is worth investigating some of the non-dealing desk brokers such as EFX Group, Hotspot, etc.

    These brokers have much tighter spreads (generally 1-2 pips, even zero sometimes) depending on the current liquidity in the market, but then you pay a straight transaction fee on each round trip part of your trade (for example, EFX charges $5 per $100,000 traded).

    Apart from spread costs and transaction fees the most likely other cost comes from slippage. This occurs when your broker is unable to fill your order at your requested price and instead fills it at the next available market price. Slippage most frequently happens around economic news releases when price can be very volatile and moves large number of pips in seconds.

  6. #6
    Join Date
    Dec 2006
    Posts
    12

    Default Watch the interest

    I would consider interest as one of the costs as well.
    Certain currency pairs bear relatively high interest.
    I paid $52.00 for holding AUD/JPN for 1 nite only.
    Eur/JPN cost me around $ 50.00 to $60.00 for 1 lot 1 nite.depends on the rate at the time,I guess
    So we better consider how much profit we will expect to gain when we are going to hold a certain position overnite.

  7. #7
    Join Date
    Dec 2006
    Location
    Wichita Falls, TX
    Posts
    2,805
    Carry interest absolutely must be included in the cost of trading. That said, it goes both ways since you can also profit from it as well. Consider that a hidden profit.

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