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Trading data

The full cost of trading, itemised

Most traders track only the spread. Four separate costs act on an account, and the ones people ignore are usually the largest.

Spread

Paid on every entry as the gap between bid and ask. Multiply typical spread by pip value by monthly lots to get the monthly figure.

Commission

Charged per lot on raw-spread accounts, usually round-turn. Compare account types by adding commission to the raw spread and putting the result next to the standard account spread.

Swap

Charged or credited every night a position stays open, with a triple charge on one weekday to cover the weekend. On multi-day trades this frequently exceeds every other cost combined.

Slippage

The difference between the price you expected and the price you received. It is not a fee, but it behaves like one over a large sample, particularly for market orders placed around news.

Working out your real number

Take last month's trade history: total lots traded, average holding time and number of nights held. Apply the four costs above. The result is what your strategy must beat before it earns anything.