I tried searching, but my terminology and newness may be preventing me from finding what I'm looking for.
I'm trying to figure out how I can figure out what kind of commissions, and fees I should be allowing for when I get to the point of trading.
When I finally get to it, I'm hoping to to start somewhere between 500 and 1000, and from all the information I've read so far I'll be starting with Micro Forex. I understand that there is possibly a little more risk involved, and I won't be quitting my job any time soon. At this point I'm not viewing this as a potential career, but more of a hobby that may or may not give me a little disposable income.
I've looked at a few sites and I can see formulas for calculating commissions, but something doesn't make sense, and maybe I'm missing something.
For example : AMP Futures commission table for Forex says Trades <= 1,000,000,000 have a commission of 0.20 basis point * Trade Value with basis point of 0.0001, and a minimum commission of 2.00 per order. This rate goes down as the trade value goes up.
Now correct me if I'm wrong (which is entirely possible). But if Micro Forex trades a $.10 per pip that would mean I would need to gain 20 pips to the positive before I even start to actually trade in the green. This is of course on top of any platform and data feed fees.
Are there any other fees that I might be missing? I thought I read somewhere that some brokers also add pips to the trade as commission. Would this be on top of the flat rate of 2.00?
I would imagine that each broker charges things differently, but it sure would be helpful if someone who actually trades Micro Forex could give me an example of some fees that would be charged per contract.
Most micro forex brokers will only charge you the spread, and no commissions.
I'm not sure what Amp offers as far as forex, but if it's topping out at a Billion dollars, it's not micro.
In the world of forex a single lot is generally $10,000.
If you're doing micro lots (at your mentioned 10 cents a pip), your trading in lots of $1000.
Most spreads on the Majors are a pip or 2. So you're usually going to see 20 cents per mini-lot (give or take) in transaction costs (not commission).
Hope this helps.
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