Length : 2.00 Minutes
What is the Cost of Trading?
The cost of trading is the overall expense that a trader has to incur in order to run his/her trading business.
There are optional costs for some specific services that a trader may wish to purchase in order to improve his/her trading performance, such as
EA (Expert advisor for automated trading), news feed, custom indicators, technical strategies, and VPS (Virtual private server, to run EAs, eliminate connectivity failures, and system downtimes).
But the most important fact is that there are also some compulsory costs that every trader has to pay, in order to trade. Generally speaking, for every trade that a trader places, he/she will have to pay a certain amount in costs to the broker. Usually these costs are the commission fees, swaps and the spread charged by the broker for every order placed.
Taking these costs into consideration is crucial to succeed in the FX market as a trader.
Many traders ignore the costs of trading and therefore, underestimate the challenges to generate a long-term steady profit.
Failure to succeed and generate profit in the FX market for many traders is not necessarily down to not being able to trade well, in fact most of the times is due to under-estimation and mismanagement of the costs involved that can lead to failure, when in fact the trading results should, in theory, lead to success.