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How much does a 1 pip difference matter over a year?

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Shadow Trader
Posts: 5438
Joined: Wed Sep 09, 2026 5:19 pm

How much does a 1 pip difference matter over a year?

Post by Shadow Trader »

Consider a scalper taking 20 trades per day, 5 days per week, 48 weeks per year. That is 4,800 trades. If each trade loses just 1 pip to slippage or a slightly worse broker spread, the annual cost is 4,800 pips.

At 1 dollar per pip on a micro lot, that is 4,800 dollars. At 10 dollars per pip on a standard lot, it is 48,000.

Now compare that to a strategy that earns an average of 2 pips net per trade. Over the same 4,800 trades, that is 9,600 pips. A single pip of friction removes half of the profit.

This is why broker selection is not an administrative detail. A broker with 0.1 pip tighter average spread can be worth more than a better indicator.

It is also why scalpers who count only wins and losses miss the largest variable. Average cost per trade deserves its own column in the journal, next to the result.

What is the all-in cost per round trip on the pairs traded here, commission and spread together?
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