eToro – Forex Trading Forum

[kimmigirl]

I can't seem to find out what the brokerage fees are when you start to "trade for real". Can anyone tell me?

Many thanks
Kim

[forexBull]

most of the brokers do not charge you with any fee,

if you start trading for real, then you can buy and sell without fixed fees, but what you do pay is the spread between the BID price and the ASK price of every pair you trade ,

Lets say that the price of EURUSD is trading right now at 1.5805 BID and 1.5807 ASK
if you want to buy EURUSD you will pay 1.5807 and if you want to sell it you will get 1.5805,
the two pip's spread between the ASK and the BID goes to the broker. So what you want to do is find a broker with really low spreads between major pairs like EURUSD GBPUD and USDJPY
two pips spread - like what you get on e-toro is considered low, I rememeber when i started trading years ago it used to be at least 5 pips spread between the major pairs.

If you trade pairs with less trading volume -like AUDNZD , then the spread can be higher.

[milantrade]

All our customer care executives are currently busy. Your call is important to us. You will be attended to shortly," poured out a feminine voice through the receiver. "There may be more important calls than mine," he thought, switching the receiver to the other ear. Had it been his earlier broker, he could have just rung up the old man and clarified his doubts.

[milantrade]

Three months ago, he had opened a trading account with XYZ Broking. It said it would charge him a flat fee of Rs 500 a month for trades worth Rs 2 lakh.

The old man was charging him 0.4 per cent while the new offer seemed exciting at 0.25 per cent. In the first month, he had traded for Rs 50,000. That, in effect, had cost him 1 per cent in commission [(500/50000)x100].

This time around, he decided to trade more and ended up clocking a turnover of Rs 3 lakh. He was charged Rs 1,250 for the same. That amounted to a brokerage of 0.42 per cent, [(1250/ 300000)x100]. He was confused and decided to check himself on these inconsistencies in commissions.

Was why he was holding on to his phone now, for what seemed like eternity. When he was about to give up, there was a crackle on the other end and someone answered.

When he raised his question, that someone shot back immediately, "For the Rs 1 lakh you traded above the allowed limit of Rs 2 lakh, a brokerage of 0.75 per cent was charged" (the brokerage on first Rs 2 lakh was Rs 500, plus a brokerage of 0.75 per cent was charged on the next Rs 1 lakh, i.e., a total of Rs 1,250, [500+(100,000x0.75) /100].

The old man, for sure, would have charged a lower rate for a transaction of this size, he sighed.

Ahead of the entry of players like R Trade, the tussle for clients among brokerages has just got tougher. And in the process, they've been launching one scheme after the other to lure new customers and retain existing ones. Flat fee seems to be the flavour of the season.

But flat is perhaps a little distorted in some cases. They are viable only for heavy traders or big investors as trades of lower sizes make commissions shoot through the roof.

As in the normal schemes, the fixed cost components of trading like the securities transaction tax, exchange transaction fees and service tax come above the brokerage charges in all cases.