Comparing Trading Costs and Platforms

A fair cost comparison

• Use the same pair, the same session and the same account type at each broker.
• Convert commission to pips per lot and add it to the spread.
• Prefer typical or average spreads to minimum spreads; a minimum is a marketing number.
• Add the swap for the number of nights you usually hold.
• Include any inactivity, funding or conversion fee you would actually pay.

Reading spread tables

Brokers publish spreads from, meaning the best they ever show, and sometimes average spreads over a period. The average is the useful one. If a broker only publishes a from figure, open a demo and watch the spread at the times you trade for a few days; the difference between the two figures is often a whole pip.

Testing a platform

Place every kind of order you use. Modify a stop on an open position. Close half a position. Check the chart on your phone in landscape. See whether the platform offers the timeframes, indicators and alerts you rely on. If you trade automated strategies, confirm the platform supports them and the broker permits them. A platform that is elegant in a screenshot and clumsy on a bus is the wrong platform.

Beyond the platform

Check the broker's execution during a news release on the demo, while remembering that demo fills are usually kinder than live ones. Read the client agreement for anything on scalping, hedging or expert advisors. And note the base currencies offered: an account in your own currency avoids conversion fees on every deposit and a hidden cost on every trade.

Key takeaways

• Compare round-trip cost per lot on your pairs at your hours, using average not minimum spreads.
• Add swaps and fees you will actually pay.
• Test the platform on a demo for the things you will really do.
• Read the client agreement for restrictions on your style.