Account & costs
The spread in currency terms, and as a percentage of the risk on the trade.
The spread in currency terms, and as a percentage of the risk on the trade. The page states the equation, the units it expects and the rounding it applies, so the result can be reproduced by hand.
A calculator gives you a number. This one feeds the next: account to risk, risk to position size, position size to the trade, and the trade to expectancy, drawdown and risk of ruin.
See the performance tools →The second line is the one worth reading. The spread in isolation means little; the spread as a fraction of the stop tells you whether it is material.
A 1.2-pip spread on one lot, against a 20-pip stop, 200 trades a year:
Six percent of every stop, paid on entry, before the trade has done anything.
On a 1.2-pip spread and one standard lot, $12 per trade. At 200 trades a year that is $2,400 — nearly 10% of a $25,000 account.
When it is a small fraction of the stop. Under about 5% it is a rounding error; over 10% it is a material part of the trade.
Around news, at the session rollover and in thin conditions, because fewer participants are quoting. The advertised spread is an average over hours when it is tightest.
A calculator answers one question and raises the next. These are the ones this figure feeds into.
Round-turn cost per trade, and what share of your risk it eats.
The move required to cover spread, commission and financing before anything is profit.
Average true range, for stops and targets that scale with volatility.
Spread Calculator · rounding shown to the precision displayed