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The price you see is not the full cost of trading. Several hidden costs sit between your idea and your realised profit, and ignoring them is a common reason strategies that look great on paper underperform in reality.
The price you see is not the full cost of trading. Several hidden costs sit between your idea and your realised profit, and ignoring them is a common reason strategies that look great on paper underperform in reality.
The spread is the gap between the buy and sell price. You start every trade slightly behind, and that gap is effectively a cost you pay on entry.
Wider spreads on volatile instruments or during news matter more for short term strategies that trade frequently.
Holding certain positions overnight can incur a swap charge or credit based on interest rate differences. Over many nights this adds up.
Slippage happens when your order fills at a slightly different price than intended, usually in fast markets. Realistic strategies budget for it.
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