I wanted to get some clarification on what it takes to break-even every time a trade is placed. I read this article on Understanding Forex Trading Spreads @ Understanding Forex Trading Spreads and Investment Costs | FinancialTrading.com for some further insights, but need confirmations. (Can’t post links as a newer user, but I think I can just mention it)
- Every time I open a position, do I immediately begin with negative profit due to the “commission” that is mentioned in the article?
For example on a EUR/USD 1.1900/05 five pip spread from the article. I open a trade on a standard lot of 100,000 units on a 50:1 leverage (USA resident). $119000 - $119050 = $50. At a 1/50th leverage, the commission cost to open this trade is $1.
- Assuming the spread remains the same when I close the position, I have to make more than the five pip spreads AND the commission of $1 in order to make a profit?