The four layers you actually pay
The cost of a trade is not one number but four layers, three of which do not appear on screen before execution:
- Spread — paid once, on entry.
- Commission — per lot per side, so a round trip pays it twice.
- Slippage — on entry, and frequently on exit too.
- Swap — repeating every night.
The usual account comparison looks at the first layer alone, which is structurally incomplete: every setup shifts part of its cost into a different layer, so comparing spreads automatically favours whoever hid theirs elsewhere. Details in execution cost.
Why the share of risk is the decisive number
Nine dollars fifty sounds trivial, and out of context it is. But on a $1,000 account risking 1% — ten dollars — the cost has consumed 95% of the risk budget before price has moved at all.
This explains an observation many traders make without explaining: a strategy that is sound on paper loses in execution. Positive expectancy before costs can be negative after them, and it is the most common reason sound-looking systems fail — see expectancy.
So the tool shows the ratio rather than the amount alone, and computes how far price must travel merely to cover the cost.
Why compare two setups rather than cost one
Because the real decision is a comparison, not a measurement. Nobody asks "what does my trade cost?" in a vacuum; the question is always "which is cheaper for *my* method?" — and the answer changes with frequency, holding period and size.
An example from the tool: over three nights the ECN account wins by just 40 cents. In a same-day scalp — no swap at all — the gap widens in its favour, because the tighter spread applies across more trades with no nightly cost diluting the difference. Same setups, same broker, different answer because the method differs. See ECN accounts.