The real cost of a trade, in one number

[Amanhasnoname]

Spread, commission, slippage, swap, and conversion all hit the account, and each one is commonly reported separately. The number that matters is the total, expressed in pips per round turn.

A straightforward way is comparing the gross price move of each trade with the net result credited to the account. The difference, averaged over many trades, is the real cost.

Typical surprises: the figure is higher than the advertised spread plus commission, often by 30 to 100 percent, because of slippage and timing.

Once known, the figure sets the bar for the strategy. If the average gross winner is 2.5 pips and the cost is 1.4, the net is 1.1, and a small increase in cost threatens the edge.

The cost also varies by session and conditions. Computing it by hour shows where it spikes.

Revisiting the number every few months guards against drift, since broker conditions change.

What is the all-in cost per trade on your account, and how does it compare with the advertised figure?