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A Cost Tracker That Shows Costs in R

Goal: for each trade, compute the total cost in dollars and in R, so that you see how much of your edge goes to the broker.

Columns. A: spread in pips. B: lot size. C: pip value per lot. D: commission in dollars. E: swap in dollars. F: dollar risk of the trade. G: total cost. H: cost in R.

Spread cost in dollars: A times B times C. Total cost, in G2:

=A2*B2*C2+D2+E2

Cost in R, in H2:

=G2/F2

Test with a trade. Spread 1.2 pips, 0.40 lots, 10 dollars per pip per lot, commission zero, swap zero. Spread cost: 1.2 times 0.4 times 10, which is 4.80 dollars. Risk 100 dollars. Cost in R: 0.048.

Add a swing trade held a week with swap of 9.10 dollars: total cost 13.90 dollars, 0.139R.

Summaries. Total cost: =SUM(G2:G101). Average cost in R: =AVERAGE(H2:H101). Cost as a share of gross profit: =SUM(G2:G101)/SUMIF(result column,">0").

The average cost in R has a direct reading: if your expectancy before costs is 0.15R and your average cost is 0.05R, a third of your edge disappears.

Break down by pair and by hour with a pivot table. Costs concentrate in certain pairs and at certain times, and the pattern suggests changes.

Exercise: fill in the sheet for ten trades, and report your average cost in R.

A scalper holds a long and a short in the same pair on a hedging account, treating them as cancelling. At rollover, each leg is charged or credited its own swap. On many brokers, the long swap and the short swap don't offset. Both can be negative.

Typical reasons: the broker adds a markup to both sides, so one leg earns a little and the other pays a lot, and the net is a cost. On a Wednesday, the triple charge applies to both legs.

Margin treatment varies. Some brokers charge reduced margin on locked positions, others charge full margin on both.

Locking a position and leaving it open is sometimes used to wait out a bad moment. If it stays locked for days, the carrying cost is real and invisible on the chart.

The contract specification lists swap long and swap short for each pair. Adding the two together tells the cost of a hedge held through rollover.

Has the cost of holding a locked position over several nights been calculated, and was it surprising?