Routes through the courseSix lessons on the three costs of a trade and how account type and holding period change them.
Stop losing money to spreads and swaps
Lessons on this route
6 lessons
- 1 · Lesson 1.5
The three costs: spread, commission, swap
You pay the spread on entry, commission on some account types, and swap for every night a position stays open. All three are known before you trade.
- 2 · Lesson 1.6
Overnight swap and swap-free accounts
Swap is the daily cost of holding a leveraged position. A swap-free account removes it and usually replaces it with another charge.
- 3 · Lesson 1.13
Account types: standard, raw spread, cent
The same trade costs different amounts on different account types. Raw spread accounts move the cost into commission rather than removing it.
- 4 · Lesson 2.11
Scalping: why costs decide the outcome
At a few pips per trade, the spread and commission are most of the result. The lesson is the arithmetic, before the technique.
- 5 · Lesson 2.13
Swing and position trading
Holding for days or weeks moves the cost from spread to swap and the risk from one session to overnight gaps.
- 6 · Lesson 2.14
Sessions, news and the calendar
Which hours a pair actually moves in, and which scheduled releases widen spreads enough to matter to a stop.
What this route is for and who it suits
This route is for a reader who has placed a few trades and watched the account balance fall by more than the chart seemed to justify. The entries looked reasonable. The direction was often right. The money still went missing. That pattern usually has a cause that sits outside the price: the cost of opening the trade, the cost of keeping it, and the cost of the account the trade was placed through.
The six lessons here are not arranged by difficulty. They are arranged by cost. The first lesson names the three charges that leave an account, so a reader can see them as separate things rather than one vague leak. The lessons after that deal with the two charges that change most with behaviour: swap, which depends on how long a position is held, and the account type, which decides how the spread and commission are split.
The route is short on purpose. It is a plan of work, not a reading list. Each lesson asks the reader to check one number against their own account, so by the end they hold a small set of real figures instead of general advice. Anyone who wants a broad introduction to charts should take a different route first. This one assumes a reader can already place a buy or a sell order and read the price on the screen.
The order of the work, and why it runs that way
Start with the three costs because they are the vocabulary the rest of the route uses. Spread, commission and swap are often described together as "fees", which hides the fact that they behave differently. Spread is paid at the moment of entry and again at exit. Commission is charged per trade or per lot. Swap is charged for each night a position stays open. Until those three are separated, no comparison between two ways of trading is possible.
Swap comes second because it is the cost most beginners meet by accident. A trade held for a few days can pay more in swap than it paid in spread, and the amount depends on the instrument and on the direction of the trade. Once a reader understands that a position has a daily rent, the choice between holding and closing becomes a costing decision rather than a feeling.
Account type comes third because it sets the terms for everything after it. A standard account, a raw spread account and a cent account charge differently, and the right one depends on how often a reader trades and how long they hold. Only then do the last three lessons make sense, because scalping, swing trading and trading around sessions all change the number of trades and the number of nights, and those two numbers are what the earlier lessons taught a reader to count.
What to prepare, what finishing gives, and where people go wrong
Before starting, have three things ready. A demo account with the same account type as the live account, so the figures are comparable. A record of two or three trades already placed, with the entry price, exit price, size and how many nights each was held. And a way to note figures as they are found, because the route asks for numbers rather than impressions. No money needs to be at risk for any of this.
Finishing the route does not make anyone profitable, and nothing here promises that. What it gives is a way to price a decision before taking it. A reader who completes it can look at a proposed trade and estimate what the spread, the commission and the expected number of nights will cost, then compare that total with the size of the move they are hoping for. That comparison is the whole point. If the expected move is smaller than the cost, the trade is a poor one regardless of how the chart looks.
The common mistakes are predictable. Readers skip the first lesson because it sounds basic, then argue about account types without the vocabulary to compare them. Others treat swap-free as free, when the cost is often moved into the spread instead, and the terms vary between brokers. A third mistake is copying settings from a video or a forum post without checking them against their own account. Costs differ by broker, by account type and by instrument, so a figure that is correct for one account can be wrong for another.
One more error is worth naming. Readers often test a cost plan on a demo account with different conditions from their live account, then wonder why the live figures do not match. Keep the two account types the same, or the comparison says nothing.
A last point on pace. The route can be worked through in a few sittings, but the checking takes longer than the reading. That is normal, and it is where the value sits.
Doing it once, step by step
Work through the route in the order given, and after each lesson write down one figure from your own account before moving on.
- 01
Write down the three costs separately
Open the lesson on spread, commission and swap and note each one as a separate line. For USD/ZAR around 18.4100, a spread of a few points has a rand value that depends on your trade size, so calculate it rather than guessing. Do the same for commission if your account charges it. Leave the swap line blank until the next lesson fills it in.
- 02
Find the swap on your own instrument
Look up the swap rate your broker publishes for USD/ZAR, for both a long and a short position. Note that it is usually quoted per night and that the two directions can differ. Multiply it by the number of nights you would realistically hold a trade. If your account is advertised as swap-free, check whether the cost appears in the spread instead, because terms vary between brokers.
- 03
Match the account type to your behaviour
Decide roughly how many trades you place in a month and how many nights you usually hold. A raw spread account with a separate commission suits frequent, short trades. A standard account with a wider spread suits fewer, longer trades. A cent account lets a reader use smaller amounts while learning, though the costs are still real. Compare the three using the figures you already wrote down.
- 04
Test the cost against a typical move
Take a trade you would normally consider and estimate the total cost: spread at entry and exit, commission, and swap for the expected nights. Compare that total with the size of the price move you are hoping for. If the cost is a large share of the move, the trade needs a bigger move to be worth taking. This is the calculation the route exists to teach.
- 05
Check the calendar before holding overnight
Look at the economic calendar for the days you plan to hold. Scheduled releases can move USD/ZAR sharply, and a position held through one carries more risk than the same position held through a quiet session. Note also that swap is often charged at a higher rate on one day of the week to cover the weekend, and the day varies between brokers.
- 06
Review the figures after a month
Keep the notes you made and compare them with the actual costs on your statement after a month of trading. Where the two differ, find out why before changing anything. Costs change with market conditions and with broker terms, so this review is not a one-off task. Repeat it when your trading frequency or holding period changes.
Questions that come up next
I have been trading for a few months and my account is down even though I often get the direction right. Where is the money going?
It is usually going out in costs rather than in losing trades. Every position you open pays a spread, and some accounts also charge a commission. If you hold the position overnight, a swap is added or subtracted each night. Those three charges are separate and they add up. This route exists to help you find which of the three is doing the damage in your own account.
How do I work out what a trade actually costs me before I place it?
You need three numbers from your own platform. First, the spread in rand for the size you trade. Second, any commission charged per trade or per lot. Third, the swap rate for holding overnight, which varies by instrument and by direction. Add them for the period you expect to hold. If you cannot find one of the numbers, ask your broker for it before you trade again.
Is a swap-free account always cheaper than a standard account?
No. A swap-free account removes the overnight charge but usually replaces it with a higher spread or a fixed administration fee. Whether that is cheaper depends on how long you hold positions. If you close everything before the daily cut-off, swap-free may cost you more. Compare the total cost for your own holding period, not the headline feature.
Should I use a cent account while I am learning?
A cent account lets you trade very small sizes, so the rand cost of a mistake is smaller. That can help you practise without risking much. But the spread is often wider in percentage terms than on a standard account. It is a tool for reducing risk, not a way to make costs disappear. Check the spread on the cent account against the standard one before you decide.
Why does this route talk about sessions and news if the goal is to cut costs?
Spread is not fixed. It widens when liquidity is thin, such as late at night or around major news releases. A trade opened at a quiet hour can cost several times more than the same trade at an active hour. Knowing when spreads widen lets you choose when to enter. That is a cost decision, not a chart decision.
What should I have ready before I start this route?
You need an account you can already place a buy and a sell order from, and access to its fee schedule. Have your last ten trades available, with the spread, commission and swap for each one. A calculator or spreadsheet is enough. Without your own figures, the lessons stay theoretical and you will not find your leak.
The words used on this page
- spread
- The gap between the price you can buy at and the price you can sell at. It is paid every time you open and close a trade. On USD/ZAR around 18.4100, a spread of 100 points costs R1 per 0.01 lot.
- commission
- A separate charge some accounts add on top of the spread. It is usually a fixed amount per trade or per lot. Not all accounts charge it, so check your own fee schedule.
- swap
- A charge or credit applied when you hold a position overnight. It depends on the instrument, the direction of the trade and the broker. It is charged for each night the position stays open.
- swap-free account
- An account that does not charge overnight swap. The cost is usually recovered through a wider spread or a fixed fee. It is not automatically cheaper than a standard account.
- raw spread account
- An account where the spread is close to the market's own and a commission is charged separately. The total cost can be lower for frequent trading, but only if you count both parts.
- liquidity
- How much buying and selling is happening at a given time. When liquidity is thin, spreads widen. Sessions and news releases are the main times this changes.
What to take away
- Spread, commission and swap are three separate costs, and only one of them is paid at entry.
- Swap is a daily rent on a position, so holding longer changes the total cost of a trade.
- Account type decides how spread and commission are split, and the right one depends on how you trade.
- Spread widens when liquidity is thin, so the hour you enter is part of the cost.