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Home » Our Methodology » Forex Fees

Our Methodology To Measure Forex Fees

In 2023 we wanted to not just take forex brokers on their word but actually test and compare their fees. Based on that goal, each month we compare and tabulate each broker’s published fees data and then have tested this in controlled enviroments.

Written by Ross Collins

Edited by Justin Grossbard

Fact Checked by David Levy

Edited by Justin Grossbard

Fact Checked by David Levy

Updated: 01/09/2023

What Changed?

Each month we update average spreads data published by the brokers the retail brokers lose %

Fact Checked

We double-check broker fee details each month which is made possible through partner paid advertising. Learn more this here.
Compare Forex Brokers Methodology

Our forex comparisons and broker reviews are reader supported and we may receive payment when you click on a link to a partner site.

Forex Trading Costs

25% of our overall Forex Broker Score is devoted to Forex trading costs.

The trading cost is the amount your trade must move before you make a profit. For example, if you go long (buy) 1 lot (100,000) with a trading cost of $10, your trade will need to increase by $10.00 before making any profit. The lower the trading cost, the more profit you can make.

Low trading costs are crucial to your success if your trading strategy relies on profits of just a few pips (e.g., scalping) or automated trading.

We collate published data from brokers’ websites to compare trading costs across brokers. We also use a freely available MT4 indicator, Spread Monitor, on live trading accounts. We open Standard Accounts (those with no commission but with variable spreads) and Raw Accounts (those with a fixed commission and lower variable spreads) and perform our tests over 24 hours.

How We Compare Standard Account Spreads

Standard Accounts charge no commission but have variable spreads (the difference between the bid and ask price). The spread is the only trading cost we need to account for this type of account.

We compare spreads for Standard Accounts in two ways:

  1. By comparing the average spreads published on brokers’ websites
  2. By comparing the test results we get from running the spread monitor

Comparing Published Average Spreads

We collate data from brokers’ websites monthly. The table below shows the published spread data our team collated in September 2023. The most recent data can always be found on our lowest spread broker page.

Standard Account Spreads
ic markets spreads logo
0.62 0.77 1.27 0.83 0.74
pepperstone spreads logo
1.10 1.20 1.40 1.40 1.40
ig markets spreads logo
1.13 1.01 1.71 1.66 1.12
xtb spreads logo
0.90 1.30 1.40 1.40 1.40
city index spreads logo new
0.70 2.20 1.10 1.10 0.60
saxo markets spreads logo new
1.20 0.90 1.50 1.80 1.80
forex.com spreads logo
1.20 1.40 1.50 1.60 1.50
oanda spreads logo
1.10 1.20 1.40 1.50 1.20
fp markets spreads logo
1.10 1.30 1.30 1.30 1.30
axitrader spreads logo
1.20 1.30 1.20 1.30 1.10
swissquote spreads logo
1.70 1.60 1.70 2.00 1.60
hf markets logo for spreads provider
1.20 1.80 1.90 1.90 1.60
fxcm spreads logo new
1.30 1.70 2.10 1.40 1.50
cmc markets spreads logo new
1.12 1.64 0.86 1.30 1.38
fxpro spreads logo new
1.32 1.95 1.37 1.70 1.40
hycm spreads logo new
1.20 1.30 1.50 1.30 1.20

Avg. spreads are taken from each broker's website and updated monthly. Last update on 01/09/2023

Testing Actual Standard Account Spreads

The six major currency pairs – AUDUSD, EURUSD, GBPUSD, USDCAD, USDCHF and USDJPY are used to conduct our testing. The spread monitor’s screen output looks like this on an AUDUSD chart for H1 (hourly) data:

audusdh1

The indicator also writes the results to CSV files, providing us with data to perform our analysis. A typical CSV (for GBPUSD data at IC Markets) looks like this.

Time MaxSpread AvgSpread MinSpread
2023.03.14 08:00 1.40 0.92 0.60
2023.03.14 09:00 1.40 1.09 0.60
2023.03.14 10:00 1.40 1.22 0.60
2023.03.14 11:00 1.40 1.08 0.60

How We Compare Raw Account Spreads

RAW Accounts charge a fixed commission and have variable spreads (generally lower than for Standard Accounts). RAW accounts at some brokers are also known as “Zero”, “Pro”, “Prime”, “Direct”, “FX-Active”, “Plus+”, “Razor”, and “Edge” accounts. It seems brokers like to attach their branding to these accounts.

We compare spreads for Raw Accounts in two ways:

  1. By comparing the average spreads published on brokers’ websites
  2. By comparing the test results we get from running the spread monitor

1) Comparing Published Average Spreads

We collate data from brokers’ websites monthly. The most recent data is below (commissions “per side”).

ECN Forex Spread Comparison
eightcap spreads logo
0.06 0.20 0.23 0.42 0.27
fp markets spreads logo
0.10 0.30 0.20 0.30 0.20
pepperstone spreads logo
0.12 0.50 0.47 0.40 0.22
go markets spreads logo
0.20 0.30 0.20 0.40 0.20
xtb spreads logo
0.30 0.60 0.50 0.50 0.50
atc spreads logo
0.30 N/A 0.30 0.50 0.40
axitrader spreads logo
0.44 0.83 0.20 0.40 0.42
ig markets spreads logo
0.17 N/A 0.24 0.54 0.30
London Capital Group
0.20 0.70 0.30 0.50 0.40
admiral markets spreads logo
0.10 1.10 0.30 0.60 0.50
fxtm spreads logo
n/a 0.30 n/a 0.60 0.50
dukascopy spreads logo
0.44 1.41 0.77 1.13 1.23

Avg. spreads are taken from each broker's website and updated monthly. Last update on 01/09/2023

We create lists based on this data such as the Australian lowest spread forex broker or UK lowest spread forex broker page.

2) Testing Actual Raw Account Spreads

Again, we use the spread monitor across the six major currency pairs to conduct our testing for Raw Accounts. Spreads for Raw Accounts are typically lower than those for Standard Accounts. Often, spreads for these accounts are zero, justifying the “Zero” in some brokers’ account branding.

How We Compare Commission Rates

For Raw Accounts, we compare Commission Rates by collating the commission rates published on broker’s websites. We then test that the published Commission Rates are correctly applied by opening and closing small trades in each of the six major currency pairs.

Brokers publish their commission rates in the base currency of your account. The commission is calculated per lot (100,000). If your broker’s website shows a 7.00 commission and your account is based in AUD, your commission is AUD 7.00 per lot.

Brokers publish Commission Rates either on a “per side” or on a “round trip” basis (per lot).

  • “Per side” means a commission for each of the open and close transactions for a trade. For example, if the commission is $2.50 per side, $2.50 is charged for the opening of the trade and again for the closing of the trade, giving a $5.00 total commission. Note that the entire -$5.00 will show as the commission (in your MT4 window) when you open the trade.
  • “Round trip” means a commission for both open and close together. It is the total commission for the trade. For example, if the commission is $5.00 round trip, -$5.00 will show as the commission in your MT4 window.

The following example is a report from an MT4 terminal’s Account History, showing an open trade of 0.01 lots with a commission of -$.05 (-$5.00 x 0.01). This could have been from either a $2.50 “per side” commission or a $5.00 “round trip” commission (per lot).

Some brokers charge commissions as a percentage of the transaction size rather than quoting a fixed commission per lot.

For example, CMC Markets charges 0.0025% per side. This equates to a total commission of $5 per lot (100,000 x 0.0025 / 100 x 2). Unlike other brokers, CMC markets also show the commissions as a separate line item in its Account History, as below:

We listed the best in this category on the lowest commission forex broker page.

How we Calculate Spread Costs (in USD)

This table shows the calculations we use to compare spread costs across the currency pairs. A standard USD spread cost allows us to compare spreads across brokers and currency pairs.

CurrencyPair Close Unit Size (1 lot) Pip Size Spread Value of a Pip (USD) Spread Cost (USD)
AUDUSD 0.669 $100,000 0.0001 0.82 $10.00 $ 8.21
EURUSD 1.061 $100,000 0.0001 0.73 $10.00 $ 7.31
GBPUSD 1.208 $100,000 0.0001 1.15 $10.00 $11.52
USDCAD 1.374 $100,000 0.0001 1.00 $7.28 $ 7.26
USDCHF 0.924 $100,000 0.0001 1.40 $10.82 $ 15.15
USDJPY 132.897 $100,000 0.0100 1.09 $7.52 $ 8.21

Spreads are always stated in pips in forex trading, a pip being 1/10,000th (0.0001) of a standard “lot”. A “lot” is 100,000, so a pip in the case of an AUDUSD trade is USD $10 (0.0001 x 100,000).

If the average spread for AUDUSD is 0.821 pips (for example), the cost of the spread is USD $8.21 (0.821 x $10). This method of calculation is used in the same way to give USD spread costs for EURUSD and GBPUSD spreads.

To calculate USD spread costs For USDCAD and USDCHF spreads, it’s a little more complicated. Pips are always stated in terms of the quote currency, or the second currency in the pair. So, USDCAD pips are in CAD and USDCHF pips are in CHF.

To convert CAD and CHF to hourly USD spread costs, we use the hourly close prices of the USDCAD and USDCHF respectively. For example, if USDCAD had a closing price of 1.374, the value of a pip is USD $7.27 (10 / 1.374).

Finally, to calculate USD spread costs for USDJPY, we use the same method as for USDCAD and USDCHF, with the exception that a pip is 1/100th (0.001) instead of 1/10,000th.

How we Calculate Total Trade Costs for Raw Accounts

For Raw Accounts, the total trade cost is the sum of

  • The Spread Cost
  • The Commission

We standardise spread costs across currency pairs by calculating a USD cost. However, commissions are charged in the base currency of the trading account. Our site therefore converts all trade costs to a single currency for comparison purposes.

Our Free Exclusive Forex Fee Calculator

To help traders calculate and compare the costs of individual trades we create the forex fee calculator (the first of it’s kind). This combines the average published monthly spreads with the commission rates of each broker. Of course, the commission rate is dependent on the base currency a trader selects when opening an account and this is factored into the calculator. The spread is also dependent on the currency which again is factored into the calculator. The only other factor is the forex cross value which is collected through an API.

Simply select your preferred base currency and then the currency pair and volume you want to trade to learn the forex fees by broker.

Calculate Your Trading Costs Below

Total Fees

Visit Broker

Commission

Spread Costs

Total

Total Fees

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Commission

Spread Costs

Total

Total Fees

Visit Broker

Commission

Spread Costs

Total

Total Fees

Visit Broker

Commission

Spread Costs

Total

Total Fees

Visit Broker

Commission

Spread Costs

Total

Total Fees

Visit Broker

Commission

Spread Costs

Total

Key Takeaways

  • We compare the trading costs for both Standard (no commissions, variable spread) and Raw (fixed commissions, lower variable spread) Accounts both by collating data from broker’s websites and by monitoring spreads using the MT4 indicator
  • We open live, funded accounts with each broker to test spreads and confirm the brokers published commissions
  • We calculate total trade cost for Raw Accounts as spread plus commission
  • We present total spread costs either in the chosen base currency of the user or in USD as the default

 

About the author: Ross Collins

As Chief Technology Researcher at CompareForexBrokers, Ross is in charge of driving technical innovation for the website. Ross uses his deep knowledge of Forex and Information Technology to capture and deliver real-world Forex insights that can help you make better trading decisions. Prior to joining CompareForexBroker, Ross developed trading systems for forex, bonds and options trading.

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