Ok I don’t really think i understand how the spread is figured as far as how much you [I]really[/I] made on a particular trade.
Example: If I buy 3Lots of EUD/USD with a 3 Pip Spread on a Standard Account. Am I charged $30 OR $90 ???
What about a Mini Account is that $3 or $9???
and a Mico?? .30 / .90???
Is that just automatically taken out my account right when I buy it?
What about when I sell short???
if you are using regular lots of 100,000 then each pip would be worth 10 dollars. With a spread of 3 pips that would be 30 dollars.
So if you buy 3 regular lots, that would be a position size of 300,000. Each pip would be worth 30 dollars, giving a spread to pay of 90 dollars.
However, this only works for US currency pairs. If you do like, GBP/JPY, then they’ll be a conversion from GBP to USD.
Does the broker take it out of your account when you place the order?
As soon as your trade enters, it will enter negative. So, if there was 3 pip spread and on your account and you had it set to show +/-pips on each trade entered, it would come in right away at -3 pips. If the entry was good price would continue in your direction, then you would see the negative number shrink, go to break even and then into postive pips.
So, you can see how the spread kind of stacks the trade against you from the start. You have to beat the spread before you realize profit. The spread is a bigger problem for short term traders looking to scalp, then longer term traders looking to make 50-200 pips per trade.
You also have to figure the spread into your stop loss. If you have a very tight SL of say only 7 pips and the spread is 3 pips, after the trade enters price only has to move 4 pips against you (from entry) to stop you out and lose your 7 pip SL.
This is more easily understood if you set a demo to show both the Bid AND Ask line.
Thank you very much for your help