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HELP PLEASE: A worked commission example

  • #1
  • First Post: May 24, 2007 6:49am May 24, 2007 6:49am
Hello-

I'm working out how FOREX commissions will affect my trades using EFX Group, and I've used an example below to calculate profits. Can anyone tell me if this example calculates correctly?

EFX Group Use:
- A spread of 2 pips on the GBP:USD
- Commission of $5 per $100,000 traded

so...

I trade 5 lots (1 lot = $100,000)
GBP:USD: 1 pip = $10 for 1 lot
Gross pips made on this trade = +4

NetPips = 4 - 2 (spread) = +2

Gross Profit = NetPips * $10 * 5 lots = 2 * $10 * 5 lots = $100

Commission value = $5 * 5 lots = $25

NetProfit = $100-$25 = $75 ???
  • #2
  • May 24, 2007 7:06am May 24, 2007 7:06am
"I trade 5 lots (1 lot = $100,000)"

No, 1 lot GBP/USD is GBP 100,000 / USD 197,000

"Commission value = $5 * 5 lots = $25"

Commission per side is ((197,000*5)/100,00)*5 = 49,25USD

You will pay that when you enter and when you exit the trade.
Net Profit is whatever you make on your trade minus 2*commission.

GBP/USD is the most expensive pair commissionwise on EFX, in pips it adds 1.97 pips to your spread with the current exchange-rates in effect.
  • #3
  • May 24, 2007 7:47am May 24, 2007 7:47am
See post #669 in this link. http://www.forexfactory.com/showthre...=10002&page=45
Same Whore .... Different Dress
  • #4
  • May 24, 2007 10:30am May 24, 2007 10:30am
Here is the link:

http://www.forexfactory.com/showpost...&postcount=669
  • #5
  • Jan 8, 2008 2:37pm Jan 8, 2008 2:37pm
Quoting dac_uk
Hello-

I'm working out how FOREX commissions will affect my trades using EFX Group, and I've used an example below to calculate profits. Can anyone tell me if this example calculates correctly?

EFX Group Use:
- A spread of 2 pips on the GBP:USD
- Commission of $5 per $100,000 traded

so...

I trade 5 lots (1 lot = $100,000)
GBP:USD: 1 pip = $10 for 1 lot
Gross pips made on this trade = +4

NetPips = 4 - 2 (spread) = +2

Gross Profit = NetPips * $10 * 5 lots = 2 * $10 * 5 lots = $100

Commission value = $5 * 5 lots = $25

NetProfit = $100-$25 = $75 ???


efx members of nfa?? or any organization??
  • #6
  • Jan 8, 2008 7:19pm Jan 8, 2008 7:19pm
Quoting dumbtrader
efx members of nfa?? or any organization??
Check the NFA site and you'll find out.

Or, read the EFX thread.

Either way, a little effort will be rewarded.
  • #7
  • Last Post: Jan 8, 2008 8:02pm Jan 8, 2008 8:02pm
If you have any questions in reference your broker, your should contact them and have them explain their commission process to you. You will receive your answer a lot faster.

Quoting dac_uk
Hello-

I'm working out how FOREX commissions will affect my trades using EFX Group, and I've used an example below to calculate profits. Can anyone tell me if this example calculates correctly?

EFX Group Use:
- A spread of 2 pips on the GBP:USD
- Commission of $5 per $100,000 traded

so...

I trade 5 lots (1 lot = $100,000)
GBP:USD: 1 pip = $10 for 1 lot
Gross pips made on this trade = +4

NetPips = 4 - 2 (spread) = +2

Gross Profit = NetPips * $10 * 5 lots = 2 * $10 * 5 lots = $100

Commission value = $5 * 5 lots = $25

NetProfit = $100-$25 = $75 ???
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