Routes through the courseSix lessons on the three costs of a trade and how account type and holding period change them.
Stop losing money to spreads and swaps
Lessons on this route
6 lessons
- 1 · Lesson 1.5
The three costs: spread, commission, swap
You pay the spread on entry, commission on some account types, and swap for every night a position stays open. All three are known before you trade.
- 2 · Lesson 1.6
Overnight swap and swap-free accounts
Swap is the daily cost of holding a leveraged position. A swap-free account removes it and usually replaces it with another charge.
- 3 · Lesson 1.13
Account types: standard, raw spread, cent
The same trade costs different amounts on different account types. Raw spread accounts move the cost into commission rather than removing it.
- 4 · Lesson 2.11
Scalping: why costs decide the outcome
At a few pips per trade, the spread and commission are most of the result. The lesson is the arithmetic, before the technique.
- 5 · Lesson 2.13
Swing and position trading
Holding for days or weeks moves the cost from spread to swap and the risk from one session to overnight gaps.
- 6 · Lesson 2.14
Sessions, news and the calendar
Which hours a pair actually moves in, and which scheduled releases widen spreads enough to matter to a stop.
How much does a trade cost you before it makes anything?
This route is for someone who has already opened a demo account or placed a few small live trades and noticed that the account balance falls even when the chart seems to move in the right direction. The cause is usually cost, not bad luck. The six lessons are ordered so that each one answers a cost question raised by the one before it. You do not need to know how to read candlesticks or indicators to start. You need a calculator, a notebook and access to your broker's fee schedule.
The route assumes you trade EUR/USD, around 1.0850, because it is the pair most beginners in Nigeria see first. Every cost example uses naira, written ₦, so you can compare the figures with your own account statement. If your broker quotes in dollars, convert at the rate your bank used on the day. The lessons never recommend a broker. They show you what to look for in the documents every broker must publish.
Finishing the route does not make you profitable. It makes you able to state, before you click buy or sell, what the trade will cost in naira if it lasts one minute, one day or one week. That is the skill the route builds. Everything else, such as predicting direction, is a separate problem and a harder one.
The order of the lessons and why it is fixed
The first lesson names the three costs: spread, commission and swap. You cannot compare account types until you can point to each cost on a real quote. The second lesson takes the third cost, swap, and shows how an overnight charge is calculated and when a swap-free account removes it. That comes before account types because a swap-free account is only useful if you already know what swap is.
The third lesson compares standard, raw spread and cent accounts. By then you have the vocabulary to see that a raw spread account moves the cost from the spread into a commission, and a cent account changes the size of the position rather than the size of the cost. The fourth lesson, on scalping, uses all three costs at once because a scalper may pay them many times in an hour. The fifth lesson slows the holding period down to swing and position trading, where swap grows and spread shrinks as a share of the total.
The sixth lesson, on sessions, news and the calendar, comes last because it changes the cost you pay rather than the way you calculate it. Spreads widen when liquidity is thin, and scheduled news is when thin liquidity is most likely. Doing this lesson earlier would give you a reason to avoid trading without first knowing what the avoidance costs you in missed opportunities. The order is a chain: name the costs, then change one variable at a time.
What to have ready and what finishing gives you
Before the first lesson, open your broker's fee page and find three numbers: the typical spread on EUR/USD, the commission per lot if there is one, and the swap rate for holding a long position overnight. Write them in naira beside the original currency. If your broker charges in dollars, use the rate from your last bank transfer. If you use a cent account, note that the contract size is smaller and the same spread costs you less per trade.
You also need a way to deposit and withdraw. In Nigeria that usually means bank transfer, USSD or cards. Check which of these your broker accepts and what each one costs you in fees or exchange rate margin. A cheap spread is worthless if the deposit route takes a large cut. Keep a record of one deposit and one withdrawal so you can add those costs to the trade costs later.
Finishing the route gives you a written cost sheet for your own account. It states the total cost of a one-lot EUR/USD trade held for one minute, one day and one week, in naira. You can then compare any broker or account type by replacing the three numbers. The sheet also shows you which style of trading your account type makes expensive. That is the practical result: a number you can check before every trade, not a feeling about whether trading is cheap.
Doing it once, step by step
Work through these steps in order, using your own broker's published figures, and stop when a step asks for a number you cannot find. The route is finished when you can fill in the cost sheet from the last section without looking anything up.
- 01
Collect the three cost figures
Open your broker's fee schedule and find the typical spread on EUR/USD, any commission per lot, and the overnight swap rate for a long position. Write each figure in the currency the broker uses, then convert to naira at the rate your last bank transfer used. If a figure is given as a range, write the range and note which end applies to quiet markets. Do not guess a missing figure; ask the broker's support desk in writing.
- 02
Calculate one trade at three holding periods
Take a position size you can afford, such as 0.01 lots on a standard account or 1 lot on a cent account. Work out the spread cost in naira, add the commission if any, and then add the swap for one night. Repeat for a trade held one minute, one day and one week. The one-minute figure is almost all spread and commission. The one-week figure is where swap becomes visible.
- 03
Compare your account type against the other two
Using the same position size and holding period, replace your account's figures with those of a raw spread account and a cent account. Raw spread usually lowers the spread and adds a commission; cent accounts lower the naira value of each pip. Write the three totals side by side. The cheapest account for a one-minute trade is often not the cheapest for a one-week trade.
- 04
Test the cost against a scalping plan
Write down how many trades you would need to place in a day to make the effort worthwhile, then multiply the one-minute cost by that number. If the total is a large share of the money you are willing to risk, the plan is a cost problem, not a prediction problem. This step uses the fourth lesson without needing you to have read it yet. The arithmetic is the same.
- 05
Check the calendar before you choose a session
Look at an economic calendar for the coming week and mark the scheduled news events for the currencies you trade. Note the times when you normally sit at the screen. If those times overlap with major releases, expect wider spreads and add that to your cost sheet as a range. This is not a reason to avoid the news; it is a reason to know what the news costs.
- 06
Write your own cost sheet and keep it
Combine the figures from the steps above into one page: spread, commission, swap, deposit and withdrawal costs, and the widened-spread range for news times. State the date you collected each figure, because brokers change them. Keep the sheet next to your trading record. When you next consider a trade, read the sheet first. If the expected move is smaller than the total cost, the trade is already lost.
Questions that come up next
How much does one trade on EUR/USD actually cost me in naira?
Add three figures: the spread, any commission, and swap if you hold past the daily cut-off. Suppose EUR/USD is quoted at 1.0850 with a spread of 1.0 pip on a position of 0.10 lots. One pip on that size is about ₦1,700 at a rate of ₦1,700 to the dollar, so the spread alone costs roughly ₦1,700. Commission and swap are listed separately on your broker's fee schedule, and both vary between brokers.
Why does my balance drop when the chart barely moved?
You pay the spread the moment you open, because you buy at the higher price and sell at the lower one. If you close straight away, the market must move in your favour by more than that gap before you are level. Commission and swap are added on top. A chart that looks flat can still cost you money.
Is a swap-free account always cheaper for me?
No. A swap-free account removes the overnight charge, but the broker may recover that cost through a wider spread, a fixed administration fee, or both. Whether it is cheaper depends on how long you hold. For a trade closed the same day, swap never applies, so the swap-free label changes nothing. Compare the full fee schedule, not the label.
Which account type should a beginner in Nigeria open?
That depends on your trade size and holding period, and no single type suits everyone. A cent account lets you trade very small positions, which keeps the naira cost of a mistake low while you learn. A raw spread account moves cost from the spread into a commission, which only helps if your positions are large enough for the narrower spread to outweigh that commission. Read the fee schedule before deciding.
Does the time of day change what I pay?
Yes. Spreads usually widen when few participants are trading, such as late in the New York session or around public holidays. Scheduled news releases can widen them sharply for a short period. The commission does not change with the clock, but the spread does. Checking the calendar before you open a trade is part of knowing the cost.
Can I pay for a trading account with a bank transfer, USSD or a card?
Brokers serving Nigeria commonly accept bank transfer, USSD and cards, but the exact methods and any deposit fees vary between brokers. Some charge for card deposits and not for transfers, or the reverse. Your bank may also apply its own charge. Confirm the deposit and withdrawal costs in writing before you fund an account.
The words used on this page
- Spread
- The gap between the price at which you can buy and the price at which you can sell at the same moment. It is the first cost you pay, and it is already inside the quote you see. A wider spread means a larger cost on every trade.
- Swap
- A charge or credit applied when you hold a position past your broker's daily cut-off, usually linked to the difference in interest rates between the two currencies. It is charged per night held. A swap-free account removes this charge but may recover it elsewhere.
- Pip
- The standard smallest price step for most currency pairs, usually the fourth decimal place. On EUR/USD at 1.0850, a move to 1.0851 is one pip. Pip value depends on your position size, so one pip costs more on a larger position.
- Commission
- A separate fee some accounts charge on top of the spread, often per lot traded. It is stated in the fee schedule rather than hidden in the quote. An account with a narrow spread and a commission may cost less or more than one with a wider spread and none.
- Liquidity
- How easily a market absorbs buy and sell orders without the price jumping. When liquidity is thin, spreads widen because fewer participants are quoting prices. Sessions and news releases are the usual times this happens.
- Leverage
- Borrowed exposure that lets you control a position larger than your deposit. It multiplies both gains and losses, and it does not change the spread, commission or swap you pay. A larger position means a larger cost in naira for the same price move.
What to take away
- Every trade carries three costs: spread, commission and swap. Know all three before you click buy or sell.
- Swap depends on how long you hold, so the same trade costs different amounts over a minute, a day or a week.
- Account type moves cost between the spread, the commission and the position size rather than removing it.
- Spreads widen when liquidity is thin, so the session and the calendar change what you pay.
- Finishing this route does not make you profitable. It lets you state the cost of a trade in naira before you take it.