Introduction
Trading in the forex market can be a lucrative venture, but it also comes with its own set of costs. Understanding the pricing structure of forex trading is essential for any trader who wants to succeed in this market. In this article, we will explore the pricing model of Forex.com, one of the leading forex brokers in the world.
What is Forex.com?
Forex.com is a forex and CFD broker that offers online trading services to clients worldwide. Founded in 2001, the broker is regulated by several financial authorities, including the Financial Conduct Authority (FCA) in the UK, the National Futures Association (NFA) in the US, and the Australian Securities and Investments Commission (ASIC).
Forex.com Pricing Model
Forex.com offers two pricing models: the Standard Account and the Commission Account. Let’s take a closer look at both models.
Standard Account
The Standard Account is a no-commission account that charges a mark-up on the spread. The spread is the difference between the bid and ask prices of a currency pair. Forex.com offers competitive spreads, starting as low as 0.8 pips for major currency pairs like EUR/USD and USD/JPY.
Commission Account
The Commission Account charges a fixed commission per lot traded, in addition to the spread. The commission varies depending on the currency pair and the trading platform used. For example, the commission for trading 1 lot of EUR/USD on the MetaTrader 4 platform is $5 per side, while the commission for the same trade on the ForexTrader platform is $6 per side.
Other Costs of Trading with Forex.com
In addition to the spread and commission, there are other costs associated with trading with Forex.com. Let’s take a look at some of them.
Swap Charges
Swap charges, also known as rollover charges, are fees charged for holding a position overnight. The amount of the swap charge depends on the currency pair and the interest rate differential between the two currencies. Forex.com offers competitive swap rates, and traders can view the swap charges for each currency pair on the trading platform.
Inactivity Fees
Forex.com charges an inactivity fee of $15 per month for accounts that have been inactive for 12 months or more. To avoid this fee, traders need to make at least one trade or deposit within a 12-month period.
Deposit and Withdrawal Fees
Forex.com does not charge any deposit or withdrawal fees, but traders may incur fees from their bank or payment provider.
Conclusion
Forex.com offers competitive pricing for forex and CFD trading, with two pricing models to choose from. Traders can choose between the Standard Account, which charges a mark-up on the spread, and the Commission Account, which charges a fixed commission per lot traded. In addition to the spread and commission, traders should also consider other costs such as swap charges, inactivity fees, and deposit and withdrawal fees when trading with Forex.com. By understanding the costs of trading, traders can make informed decisions and maximize their profits in the forex market.
