Importance of Transaction Costs

Lets say you are trading the EUR/USD with a commission free broker and a spread of about 2 PIPs. On a standard lot, that spread of 2 PIPs is equal to $20 USD. Assume that you trade 2 lots a day for 25 days out of the month; that's $20 USD X 50 Trades = $1000 USD a month, in the spread alone! For the sake of this example lets assume that you generate $200 in profit for the month. Now imagine if you could receive a piece of the spread on every trade you make, let's say .4 PIP, then you could have doubled your profits. $4*50 trades is a $200 cash rebate into your pocket. Now just by using an introducing broker and collecting a rebate your transaction costs have decreased and you'll get a cash bonus every month.

We will cover this more in depth in later sections in case you are still not clear. Trade Rebates

It is always a good idea to make sure that the clearing firm you are placing your trades with is stable and reputable. With TradersChoiceFX, you can have the best of both worlds; a strong clearing firm along with a trade rebate program that can improve your performance and save you thousands.

Some firms may advertise and show you a consistent spread of 1-2 pips on the EUR/USD for example. However, because the firms could be low level bucket shops, they may be either: placing your trades off market, messing with your execution, or not allowing you to withdraw your profits in a timely fashion. Bigger and more stable firms, with better service may not always be the cheapest, however their customer service, execution, and platforms will be far superior. If you combine this with an IB volume rebate such as the one TCFX can offer you, you will be positioning yourself for greater success. Next >