I haven't read good reviews about any Forex brokers

here is the sample calculation from the IB page:

"USD 50,000 daily volume for EUR = USD 2.50"

So to extrapolate that to $1M traded (for under $1B monthly size, it gets better if you trade a lot)

IF $50,000 traded = $2.50 commish one way

IF $50,000 x 20 = $1M traded

THEN $2.50 commish x 20 = $50 one way

THEN $50 x 2 for R/Trip = $100

So yes, I was off by $20 per R/T or $10 per side - my point is still valid, this is still 1/2 cost of fixed spreads even at 1 Pip and it is a lot less than your typical 2 - 3 pip spreads on majors.

Any problems with this? Correct me if I am wrong, I am open-minded about it.
 
If you trade 1 mio. eur/usd, $20 is still not right, but anyways..

Please explain how you pay 2 pips per trade as "commission" with a 1-pip fixed spread like in your example. Thanks.
 
Quote from Pippi436:

If you trade 1 mio. eur/usd, $20 is still not right, but anyways..

Please explain how you pay 2 pips per trade as "commission" with a 1-pip fixed spread like in your example. Thanks.
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Actually, it is $20 per side per $1M. See the IB commish page. It states that the rate is 0.2 of a pip - so therefore the prior posted example by our other member is right. It costs $40 to open & close $1M.

a pip = 0.0001

therefore 2/10th of a pip = 0.00002 x $1,000,000 = $20

---------------------------------------

I did not say that you pay "commission" on fixed spread. Rather the true cost of the trade is 1 Pip in and 1 Pip out.

When you open a trade, you are down one pip that the market has to move for you to get to breakeven.

When you close a trade, the market has to go 1 pip farther to fill your order at your specified price to clear the spread.

Look at it this way: in order to make 10 pips, the market has to move 12 in your favor because you lose one pip on the open and one on the close.

It is a function of only being able to open a long trade at the ask and only close it at the bid. Or open a short trade at the bid and close it at the ask.

Is this right? Again, I remain openminded to any explanation of how this is wrong. I am not perfect. Tell me if I am missing the boat.
 
Quote from cabletrader:

You think.....

Are you and IluvVol related by any chance?
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Not I think, rather the math proves. But you are welcome to keep overpaying for your trading. Matters to me not at all.
 
Quote from slapshot:

Actually, it is $20 per side per $1M. See the IB commish page. It states that the rate is 0.2 of a pip - so therefore the prior posted example by our other member is right. It costs $40 to open & close $1M.

a pip = 0.0001

therefore 2/10th of a pip = 0.00002 x $1,000,000 = $20

---------------------------------------

I did not say that you pay "commission" on fixed spread. Rather the true cost of the trade is 1 Pip in and 1 Pip out.

When you open a trade, you are down one pip that the market has to move for you to get to breakeven.

When you close a trade, the market has to go 1 pip farther to fill your order at your specified price to clear the spread.

Look at it this way: in order to make 10 pips, the market has to move 12 in your favor because you lose one pip on the open and one on the close.

It is a function of only being able to open a long trade at the ask and only close it at the bid. Or open a short trade at the bid and close it at the ask.

Is this right? Again, I remain openminded to any explanation of how this is wrong. I am not perfect. Tell me if I am missing the boat.
More...

I hate to bring it up but there is a lot more to broker selection than simple spreads.

I care about number of currency pairs offered first and foremost. Second is available leverage and at what level(GFT has 400:1 up to $10,000 account value if I am not mistaken). Third is general reputation, firm stability (financial and technical) and other things/intangibles.

Whether EUR/USD is 2 pips or 3 pips matters little to me. I am not a scalper or a day trader.
 
Quote from slapshot:

Not I think, rather the math proves. But you are welcome to keep overpaying for your trading. Matters to me not at all.
More...

Don't worry, you missed the sarcasm of the 'You think...' remark

So I'm happy paying what I pay, you're happy with me paying what I pay, hey we're both happy!

lol, I love this place but I've had too much entertainment for one day :D
 
Quote from slapshot:



I did not say that you pay "commission" on fixed spread. Rather the true cost of the trade is 1 Pip in and 1 Pip out.

When you open a trade, you are down one pip that the market has to move for you to get to breakeven.

When you close a trade, the market has to go 1 pip farther to fill your order at your specified price to clear the spread.

Look at it this way: in order to make 10 pips, the market has to move 12 in your favor because you lose one pip on the open and one on the close.

It is a function of only being able to open a long trade at the ask and only close it at the bid. Or open a short trade at the bid and close it at the ask.

Is this right? Again, I remain openminded to any explanation of how this is wrong. I am not perfect. Tell me if I am missing the boat.
More...


Actually, now that I think about it, this only holds true assuming that on the ECN you can buy a long trade at the bid and sell it/close at the ask, right?
 
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