What does holding a trade for two weeks really cost? Let's add up the spread and the swap

Costs are easy to ignore because they don't show up as a line on the chart. They matter more the longer you hold. Here is an illustration with made-up numbers; your broker's will differ.

Say you buy 0.10 lots of EUR/USD, which is 10,000 euros, so each pip is worth $1. The broker's spread is 1.0 pip, which costs $1 when you open the trade. The swap, the overnight financing charge or credit for holding a position, is -$0.50 per night. Many brokers charge three days of swap on one weekday to cover the weekend, so two weeks come to 14 days of swap in total, which is $7. Add the $1 spread and the trade needs to gain about 8 pips just to break even, before any commission.

The same trade with a spread of 2.0 pips and a swap of -$1.50 a night would cost $23 to break even, which is 23 pips. The swap can also be positive on one side of a pair and negative on the other, depending on the interest rates of the two currencies, and it changes when central banks move. The real cost of a forex trade explains spread, commission and swap in full.

Questions for members:

• Do you work out the total cost before you open a longer-term trade, and how?
• Did you ever compare swap rates across brokers or account types, and how big were the differences?
• Has a swap change, such as after a rate decision, ever changed a trade you were holding?
• Where do you find your broker's swap figures, and were they easy to find?

Please share your own experience without naming account balances. Posts that promise a direction or sell signals will be removed.