Measure effective spread per trade, not the number on the quote screen
Posted: Sat Oct 31, 2026 8:01 am
The advertised spread on a thin pair says little about what a trade really costs. Effective cost is the difference between the price on screen at the click and the fill, plus the spread at exit, plus any slippage on the stop. A pair quoted at 1.0 pip can cost 1.8 in practice during active moments.
A short trade log fixes this in a week. For each trade, record the quoted bid and ask when the order was sent, the fill price, the quoted prices when the exit was triggered, and the exit fill. Then compute round-trip cost in pips. Group by pair and by hour.
What tends to show up: costs cluster in a few bad windows, such as the minutes after a data release or the hour around rollover, while the rest of the day is close to the advertised spread. Also check whether slippage is symmetric. If negative slippage is more frequent or larger than positive slippage, that is information about the execution model, and the pattern may vary between brokers.
Once the numbers are in, the expected profit per trade of any setup can be adjusted for real costs. Plenty of setups that looked marginal on paper turn out to be negative once that is done.
What was the biggest gap found between quoted and effective cost on your main pair?
A short trade log fixes this in a week. For each trade, record the quoted bid and ask when the order was sent, the fill price, the quoted prices when the exit was triggered, and the exit fill. Then compute round-trip cost in pips. Group by pair and by hour.
What tends to show up: costs cluster in a few bad windows, such as the minutes after a data release or the hour around rollover, while the rest of the day is close to the advertised spread. Also check whether slippage is symmetric. If negative slippage is more frequent or larger than positive slippage, that is information about the execution model, and the pattern may vary between brokers.
Once the numbers are in, the expected profit per trade of any setup can be adjusted for real costs. Plenty of setups that looked marginal on paper turn out to be negative once that is done.
What was the biggest gap found between quoted and effective cost on your main pair?