Trading · 62 / 86 · 3 min
Fees, spread, and slippage
You pay to get in and you pay to get out. A hope that looks small can be smaller than those costs.
If the costs are already larger than the hope, the price can do what you wanted and you still lose. The checker under this figure uses your own numbers.
A worked case
Someone hopes to make ten dollars on a small trade. It costs six to get in and six to get out. They make the trade twice because the first one worked. Each round paid the twelve. The wins were real. The costs were larger.
Three different costs
- The fee is the posted charge, often paid on the way in and again on the way out.
- The spread is the gap between the price to buy and the price to sell.
- Slippage is the fill moving away from the number on the screen.
A plain sum
Suppose you hope to make $10. It costs $6 to buy and $6 to sell. The fees are $12. You hoped for $10. You lose even if the price does what you wanted.
Doing it more often makes this worse. Every click can pay the costs again, including the clicks that work.
Run it on your own numbers
Use dollars for the size you mean to trade. If you do not know the spread, leave it at zero and treat the answer as the best case.
The round trip was the trade
Every venue publishes a fee and then adds a spread you notice later. Centralised exchanges charge a maker and a taker fee, often on the way in and again on the way out. Pools charge a percentage of the swap. Cards hide the cost in the rate. The FCA's research is relevant because many of the people who hold crypto in Britain bought it in an app, where the fee is a screen away from the chart, not next to it.
The worked sum on this page is the whole point, and it is small on purpose. A hope of ten dollars against six to enter and six to leave is a loss even if the price does what you wanted. Doing it more often, because the first click worked, pays the costs again. High-frequency plans imported from videos ignore this and then blame the strategy. The strategy may have been the fees.
Use the checker with the size you mean, in dollars. If you do not know the spread, leave it at zero and treat the answer as the best case, not the real one.
Read it yourself
These links are the record. They are not a recommendation, and they are not instructions. A news story or a court paper can still be wrong about a detail. The check does not change because a famous name is in the story.
Apply the check
Open a question. The line is about this topic. It is not a verdict that anything is safe.
The exchange or the pool, every time you click.
Their fee schedule. Your size does not negotiate it.
The fees, which leave before the hope arrives.
This adds the costs and compares them with the hope. It does not tell you to take a trade, and it does not say you made money.
Check yourself
If the price does exactly what you hoped, have you made that hope?
Not if the fees to enter and exit were already larger.
After this you can see whether the fees are already bigger than the hope, before you click.