It’s common to hear all about the potentially enormous gains from trading on the foreign exchange market, but what of the costs? There are expenses associated with the learning curve and actions of the trading world, so here are the main costs and how to keep them to a minimum.
Training and Education
Don’t have a clue about trading yet? The best place to start is often a course, eBook or other resource. These should give you a clear rundown of the market, terminology and common strategies. While some pay thousands for in-depth courses, it’s a good idea to start simple and built your knowledge up as there will be a lot to absorb. Our own Forex Trading eBook
is a comprehensive introduction to the trading basics and best of all – it’s completely free. Another way to cut down on training is to choose a provider that offers resources and analysis along with your trading account.
Fixed or variable spreads are a standard cost of Forex trading, but not all providers charge the same. Here at ForexCT our spreads are fixed. What does that mean? You’ll see two prices, a buy/bid price and a sell/ask price, for every currency pair within the platform. The difference between these is what’s called the spread, which is a cost for opening a trade. The spreads on these currency pairs are fixed for every single trade, meaning they will not fluctuate during economic releases or at any time during the day. This adds an element of cost transparency, knowing exactly how much spread you will pay before a trade is opened.
Much of the strategy involved in Forex trading centres around pre-empting or reacting to political and financial news, and having access to professional analysis can prove invaluable. Some traders choose to pay extra membership fees for expert insights from a trader they trust, while some brokers will actually provide expert analysis as part of their service. To help minimise any losses it’s worth exploring these options, particularly when starting out.
There are several fees that can commonly be expected depending on your provider. If you hold a transaction open overnight (that is, one that is still open at 12:00am GMT), an overnight financing may apply which is calculated by multiplying the US dollar exposure of the transaction held overnight with the provider’s overnight financing fee rate. There may be a fee for depositing currency other than your account base currency, and a similar fee for withdrawals and closing transactions. Advisor fees and payments may also be applied for services related to your account. Every provider has differing fees, and at ForexCT we aim to keep these as reasonable as possible. All costs will be provided clearly within a Product Disclosure Statement when you register an account with a Forex provider.
To learn more about the costs of trading, contact
ForexCT and speak with one of our account managers.