Forex.com is a well-known and reputable forex broker that offers a variety of trading services to its users. One of the most important things to consider when choosing a forex broker is the commission charged per transaction. In this article, we will take a closer look at how much commission Forex.com charges per transaction.
Forex.com Commission Structure
Forex.com charges a commission based on the type of account that a user has. There are two main types of accounts: the Standard Account and the Commission Account. Let’s take a closer look at each of these accounts and the commission structure for each.
The Standard Account is the basic account offered by Forex.com. It is designed for traders who are just starting out and do not want to pay a commission on every trade. As such, the Standard Account does not charge a commission per transaction. Instead, Forex.com makes its money by widening the spread, which is the difference between the bid and ask price of a currency pair.
For example, if you want to buy EUR/USD, the bid price might be 1.2000, while the ask price might be 1.2002. The spread in this case would be 2 pips. Forex.com might widen this spread to 3 pips, which means that if you buy EUR/USD at the ask price of 1.2003, you will have a loss of 1 pip from the outset.
The Commission Account is designed for more experienced traders who want to pay a lower spread and a commission per transaction. The commission charged by Forex.com on this account is $5 per 100,000 units traded. This means that if you trade 1 lot, which is equal to 100,000 units of a currency pair, you will be charged a commission of $5.
If you trade a mini lot, which is equal to 10,000 units of a currency pair, you will be charged a commission of $0.50. If you trade a micro lot, which is equal to 1,000 units of a currency pair, you will be charged a commission of $0.05.
It is important to remember that the commission is charged per side, which means that if you open a trade and then close it, you will be charged a commission for both the opening and closing trades. If you open a trade and then add to it, you will be charged an additional commission for the added units.
In addition to the commission charged by Forex.com, there are other fees that you should be aware of. These include:
– Overnight Financing: If you hold a position overnight, you will be charged or credited a financing fee based on the interest rate differential between the two currencies in the pair.
– Inactivity Fee: If you do not trade for a period of 12 months, Forex.com will charge an inactivity fee of $15 per month.
– Withdrawal Fee: If you want to withdraw funds from your account, Forex.com will charge a withdrawal fee of $25 for wire transfers and $10 for credit/debit card withdrawals.
Forex.com charges a commission of $5 per 100,000 units traded on its Commission Account. This is a competitive commission rate when compared to other forex brokers. However, if you are just starting out and do not want to pay a commission per transaction, you can choose the Standard Account, which does not charge a commission but widens the spread instead.
It is important to remember that there are other fees that you should be aware of, such as the overnight financing fee, inactivity fee, and withdrawal fee. Make sure to read the fine print and understand all of the fees before opening an account with Forex.com or any other forex broker.