I’ve been looking for answers, I even asked at darwinex.info, but I don’t have a clear answer. In darwinex you charge the spread when you open and also when you close trades? I mean, twice?
Let’s say you execute a BUY order.
Any order always gets executed at the worst price for you between the two (Bid or Ask).
In this case at the Ask price in the spread (the worst for you because it is the more expensive option).
Now, here comes the good part:
To close your initial buy order you have to execute a SELL order.
Your sell order, again, is always executed at the worst price for you between the two (Bid or Ask).
In this case at the Bid price in the spread (the worst for you because it is the cheaper option).
The moment you are selling and closing your position you are accounting (once, not twice) for that difference you lost in the process and that is how you (implicitly) paid the spread.
Let’s say it’s different from how you pay commissions (explicitly).
Do you get it now?
ok, entiendo mejor.
Okay, I understand better.
Let’s say then, that if the CHFJPY has a spread of 1.5 and a commission of 0.6, I would pay
1.5 spred purchase
2.0 sale spread (hourly closing time)
Total 4.1 ?? Or I only lose 2,1 ??
You don’t lose, you just get a worse price than you see on the chart and maybe think you should get. You’re trapped by what you see on MT4/MT5.
As @DominionCuentas had written, you only pay the commission and maybe overnight swap if that is negative.
If the spread changes against you because it increases, you end up paying the current/last spread (the spread at the time of closing the position). In your example 2.0 (not the 1.5) + 0.6 in commissions.
Total cost = 2.6
If the spread keeps constant at 1.5 your total cost would be 1.5 + 0.6 = 2.1
Do you get it now?
Read again my first explanation.
In your example I can understand that if I trade in an hour of high spread 17-18h NYT (where sl chfjpy spread can reach 5.5), that spread does not affect me, as I would only be affected by the closing spread (in my case London market where there is high volume of trading)
I think you got it, but just to make sure we are on the same page…
There are three different moments in time:
Spread when you open your position: Spread “affects” you, if only from a visual standpoint.
You prefer the smallest possible spread just because you prefer to enter the market as close as you can to your desired entry point in the chart as you are watching two lines/prices (Bid & Ask).
Spread changes while your position is open: Spread does not affect you (you haven’t closed your position yet).
Spread when you close your position: Spread affects you, you want the smallest possible spread because you want to account for the smallest difference possible between Bid and Ask.
Only on MT5 you pay the commission half on the open and half on the close.
I understood thank you all
Translated with www.DeepL.com/Translator (free version)
Let´s say if you go to a pawn shop to buy a guitar and you pay 100 Euros. One minute later you try to sell the same guitar to the same pawn shop, they will pay you 90Euros for the same guitar. It is offer and demand BID and ASK. It is not a commision or fee, it is just there is a price to buy and a price to sell.
He’s not listening. He’ll learn the hard way.
No, doesn’t really work like that.
Let’s use your example. USDJPY with a spread of 0.4.
This means that the difference in Bid and Ask is 0.4, so for example:
- Ask= 108.786
- Bid = 108.782
When you open a Buy order, you always do it at the Ask price and when you close a Buy order it is always at the Bid Price.
So if you open the Buy at the Ask price of 108.786, you can only close it at the Bid price of 108.782 so you are in immediate loss of 4 ticks.
This spread is not counted again when you are closing your order. From the moment you opened it, it is “charged”. After that, you just need to look at the movement of the Bid price.
It is strange that this needs to be explained to a trader with an 8 months, and a 2 year Darwin though. This is basic stuff.
Okay, I understand, I apologize, I’ve already closed the operation and I’ve seen completely what I’ve been told. Thank you all very much.