Forex trading has exploded in popularity over the last decade, with millions of active traders around the world. While there are many forex brokers to choose from, Forex.com stands out as one of the largest and most well-established. However, like all brokers, Forex.com charges certain fees and commissions that traders need to be aware of. In this comprehensive guide, we’ll break down Forex.com’s various commissions and fees so you can make an informed decision when choosing a broker.
Commission Structure
Forex.com offers two main account types – a standard account with spreads only, and a commissioned account that charges both spreads and commissions per trade.
For standard accounts, you’ll only pay the spread, which is the difference between the bid and ask price. Spreads at Forex.com range from 1.2 to 1.8 pips on the major currency pairs which is very competitive. This account is a good choice for traders making fewer trades per month.
With a commissioned account, you’ll pay both a spread and a per trade commission. The commission charge is $5 per 100,000 traded. So on a 100,000 EUR/USD trade for example, you would pay a 5 EUR commission in addition to the spread. The main advantage of the commissioned account is that you get access to Forex.com’s lowest spreads, which can be as low as 0.2 pips.
In addition to these two main account options, Forex.com also offers spread betting accounts for UK and Ireland residents. These accounts have spreads only and no commissions. The advantage of spread betting is tax benefits, as profits are not subject to capital gains tax.
Other Fees to Be Aware Of
In addition to spreads and commissions, there are a few other fees to keep in mind at Forex.com:
- Inactivity fees – Accounts that do not have any trading activity for 90 consecutive days will be charged an inactivity fee. For standard accounts the fee is $15 per month, while commissioned accounts are charged $25 per month.
- Deposit/withdrawal fees – Forex.com does not charge for most deposit or withdrawal methods. However, wire transfers can incur a $25 processing fee.
- Conversion fees – If you deposit in a different currency than your account base currency, you will pay a conversion fee of up to 3.5%. It’s best to match deposit currency to account base currency if possible.
- Guaranteed stop orders – These stop loss orders which guarantee execution even during volatile markets cost $5 per order. Regular stop losses are free.
So in summary, while Forex.com has competitive spreads overall, traders should be aware of the difference between a standard and commissioned account structure. Commissioned accounts have lower spreads but pay a per trade commission charge. When choosing an account, consider your typical monthly trading volume and strategy. Also factor in any potential inactivity fees or conversion fees based on your deposithabits.
How Forex.com Compares to Other Brokers
When comparing Forex.com to other major brokers, they fall somewhere in the middle in terms of competitiveness on spreads and commissions. Here is how they stack up:
- Spreads – Forex.com’s spreads on the major currency pairs range from 1.2 to 1.8 pips on average. This is very competitive, with spreads similar to leading brokers like IG and Oanda. Other brokers like Pepperstone and Swissquote have lower average spreads, down to 0.1 pips.
- Commissions – The $5 commission per 100k traded at Forex.com is again middle of the road. Many brokers charge $3 to $7 per 100k. Swissquote for example charges $3 per 100k, while IG charges $7.
- Non-trading fees – Forex.com’s fees for things like deposits, withdrawals, and account inactivity are typical and on par with competitors brokers overall.
So while not necessarily the cheapest, Forex.com remains very competitive in terms of fees and is certainly not among the most expensive either. Traders who prioritize advanced trading platforms and access to global markets may find the slightly higher fees worth paying compared to discount brokers.
Tips for Reducing Fees at Forex.com
Here are some tips traders can use to reduce fees and costs when trading at Forex.com:
- Use a standard account if you trade less than ~10 lots per month to avoid commission charges and benefit from low spreads
- Keep account activity and trading volume high to avoid monthly inactivity fees
- Withdraw via electronic methods like wire transfer or ACH to avoid withdrawal processing fees
- If possible, deposit in the same currency as your account base currency to avoid conversion fees
- Only use guaranteed stop orders when absolutely necessary for volatile markets or around major news events
- Ask about loyalty discounts or reduced commissions once you establish a solid trading history and relationship
- Take advantage of any seasonal promotions or limited time offers which occasionally include reduced fees
The Bottom Line
With both low spread and commission/low spread account options, Forex.com provides a flexible structure for traders of all levels. Their fees remain very competitive in 2023, though not necessarily the cheapest. By keeping trading activity consistent, converting currencies minimally, and using the most cost-efficient account type, traders can significantly reduce fees at Forex.com and maximize profitability over the long run.
