Key Takeaways from Lesson 6
- Active day traders save $4 to $6 per lot by using ECN Raw accounts over Standard marked-up accounts.
- Swaps reflect central bank rate differentials; positive swaps can earn daily interest.
- Triple swap is charged every Wednesday night to cover weekend settlement.
- Always monitor non-trading costs: inactivity fees, wire withdrawal fees, and currency conversion markups.
Trading costs directly eat into your net returns. A strategy with a slim positive expectancy can easily become unprofitable if you are overpaying on spreads and rollover fees. Understanding how brokers generate revenue allows you to choose the most cost-effective account structure for your trading style.
Standard STP vs. ECN Raw Spread Models
| Model | Account Type | Spread Type | Commission | Best Suited For |
|---|---|---|---|---|
| STP / Standard | Standard Account | Marked up (typically 1.0 - 1.5 pips) | $0 commission per lot | Swing traders, beginners trading micro-lots without commissions |
| ECN / Raw Spread | Raw Spread / Razor | Raw interbank (from 0.0 - 0.2 pips) | $3.00 - $3.50 per lot per side ($6-$7 round turn) | Scalpers, day traders, automated Expert Advisors (EAs) |
Comparing the true combined cost of spread and commission across account types reveals massive annual savings for active traders.
Overnight Financing: What Are Swaps?
When you hold a leveraged forex position past 17:00 New York time, your broker rolls the contract over to the next trading day. A swap fee is charged or credited based on the interest rate differential between the two currencies in the pair.
Step-by-Step: How to Inspect Real Spreads & Swap Rates
3 Steps to Check Broker Fee Specifications
- Open MT4/MT5 Market Watch Window (Ctrl+M). Right-click anywhere inside the Market Watch table and select 'Columns' -> 'Spread' to display real-time live spreads in tenths of pips.
- View Contract Specification Tab. Right-click the symbol (e.g. EUR/USD) and click 'Specification'. Locate 'Swap Long' and 'Swap Short' values to see exact rollover rates.
- Check Inactivity and Withdrawal Policies. Confirm your broker does not charge dormant account fees after 90 days or penalize bank wire withdrawals with hidden intermediary surcharges.
Brokers mentioned in this lesson: published data
Figures come from Brokeli's published research snapshot and can differ by country and legal entity. This is not a recommendation.
Frequently asked questions
What is an Islamic / Swap-Free account?
Under Sharia law, earning or paying interest (Riba) is prohibited. Islamic accounts eliminate swap interest, replacing it with an administrative fee after an initial grace period (usually 3-7 days).
Can a swap rate ever be positive?
Yes. If you buy a currency with a significantly higher central bank interest rate against a low-interest currency, you can receive positive swap credits daily.