Execution costs
Forex Spread, Slippage and Swap
Visible and hidden trading costs and how they affect scalping, news and positions held overnight.
Answer first
What you should remember
- Spread is an entry and exit cost that changes with liquidity.
- Slippage is a fill difference that can be negative or positive.
- Swap depends on both currencies, broker terms and holding time.
Bid and ask
A long opens at ask and closes at bid, while a short opens at bid and closes at ask. The difference is spread, so a new trade generally begins negative by that cost.
When does spread widen?
Spread often widens around releases, weekly open, daily rollover and thin liquidity. A normally valid tight stop may be hit if execution conditions are ignored.
Slippage
Price can move between order submission and execution, producing a different fill. Market and stop orders are more exposed; limits protect price but may not fill completely.
Swap and overnight holding
Position financing reflects rate differentials and broker policy and may be multiplied on a designated day for the weekend. Check symbol specifications before a long hold; swap is not necessarily static.
Direct answers
Frequently asked questions
Is a zero-spread account free?
Not necessarily; commission, variable spreads or other conditions may still apply.
Is slippage always manipulation?
No. It can naturally result from speed and liquidity, though execution quality should be monitored and compared.