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Spread, Slippage & Swap x3: Formula to Measure Total Gold Order Execution Cost on MT5

Formula to quantify 3 types of friction fees on MT5: Spread spread, Slippage price slippage and Swap fee x3 Wednesday night. How to optimize Gold order matching costs for traders.

Spread, Slippage & Swap x3: Công Thức Đo Lường Tổng Chi Phí Khớp Lệnh Vàng Trên MT5 - AlphaOnChart
  1. 01

    The nature of the three components of friction erodes the account in silence

    Many traders have a good order winning rate but the monthly summary results still suffer from loss of profits due to not accurately calculating 3 types of hidden execution costs on the MetaTrader 5 platform: • Spread Cost: The difference between buying and selling at the floor at the time of opening the order. • Slippage Cost: The difference between the order price and the server price actually matched in highly volatile market conditions. • Swap Cost: Overnight borrowing interest cost incurred when you keep the position open until the next trading day.

  2. 02

    Mathematical formula accurately measures each fee on XAUUSD Gold

    Detailed calculation standards on MT5 (Applies to Digits = 2 accounts, 1 lot = 100 oz): • 1. Spread Cost: Spread Cost = Volume (Lot) * Contract Size (100) * Spread (Points) * Point Value (0.01 USD). - Example: Open 0.1 lot of Gold with spread 20 points (0.20 USD Gold price) -> Cost = 0.1 * 100 * 20 * 0.01 = 2.00 USD. • 2. Swap Cost: Swap = Volume * Contract Size * Swap Points * Point Value. - Important note: At 00:00 server time on Wednesday night (switched to Thursday), the exchange will charge THREE TIMES SWAP (Triple Wednesday Swap) to pay for 2 weekends according to the T+2 international clearing mechanism. • 3. Slippage cost: Incurred when placing a Stop Loss order or a pending Buy/Sell Stop order. When the price hits the trigger level, the order converts to a Market Order and is executed at the next available liquidity price in the order book.

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  3. 03

    Spread expansion phenomenon at trading hours (21:00 - 23:00 UTC) and how to avoid it

    Around the time the New York market closes and international settlement banks close their books every day (approximately 21:00 to 23:00 UTC - equivalent to early morning Asia time): • Market liquidity depth decreased seriously. • Gold spread on Standard accounts can be stretched from 20 points up to 80 - 150 points (ie from 0.80 to 1.50 USD in Gold price). • If you set Stop Loss too close during this time frame, your order may be triggered by the spread itself, not by the market price move. • Code of conduct: Limit opening new positions during trading hours and always check Swap-Free account conditions if you intend to hold an order overnight.

  4. 04

    Optimize Breakeven threshold with 100% refund program from AlphaOnChart

    The most radical solution to neutralize a large part of friction costs is to use a commission refund mechanism: • Receive 100% partner commissions from each trading lot, helping to directly offset spread and swap costs. • Register as a member on AlphaOnChart to receive transparent and automatic cost control reports.

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Forex and CFD trading carries a high level of risk and you may lose all of your capital. This content is for educational purposes only and is not investment advice. Past performance does not guarantee future results.