What Is the Method of Commission Calculation in Regards to Forex?

Forex trading involves the buying and selling of currencies, and as such, it is subject to certain fees and commissions. These fees can be divided into two main categories: direct costs (spreads) and indirect costs (commissions). The method of commission calculation in regards to Forex depends on which type of broker you are using.

For those who use a market maker broker, there are typically no commissions charged. Instead, they make money by charging a spread between the bid/ask prices for each currency pair. This spread can range from 0-3 pips depending on the broker and the currency pair being traded.

For those who use an ECN or STP broker, there are usually commissions charged per trade in addition to a spread. The amount of commission charged varies from broker to broker but is usually around $5-$10 per lot traded (1 lot = 100k units). Some brokers also offer discounts for larger volumes or more active traders.

In addition to these direct costs, there may also be other indirect costs associated with trading forex such as bank wire transfer fees or withdrawal fees if you’re using an online payment processor like PayPal or Skrill. It’s important to check with your broker before you start trading so that you know exactly what their fees are and how they will affect your bottom line.

To sum up, the method of commission calculation in regards to Forex depends on which type of broker you are using – market makers typically charge no commissions but make money through spreads while ECN/STP brokers usually charge both spreads and commissions per trade. In addition, there may also be other indirect costs associated with trading forex so it’s important to check with your broker before starting so that you know exactly what their fees are and how they will affect your bottom line!