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Next: find the move that pays for the spread
The break-even calculator turns spread, commission and size into the number of units a trade must move before it is in profit.
What is included
- What it is, in plain words
- The formula or mechanism, with exact arithmetic
- How it hits grid, martingale and DCA bots
- A check you can run before you switch a bot on
Who it is for
- People who run or plan to run a trading bot
- Anyone reading a backtest or a bot sales page
- Readers who want the numbers, not the pitch
- Not advice, and not a signal service
Key facts
- The spread is the difference between the ask (what you pay to buy) and the bid (what you receive to sell). Buy and sell back immediately and you lose the spread.
- At 1.2 pips on a 10,000 unit position the cost is $1.20 per round trip. At 10 round trips a day for 252 days that is $3,024.00 a year (calculated by us on 27 Oct 2026, exact).
- Spreads are not fixed. They widen at news releases, at the daily rollover and in thin hours, which is when bots often trade.
- A tight grid or scalping target can be mostly spread. Spacing of 10 pips gives away 12 percent of each cycle to a 1.2 pip spread.
- Log the spread at the time of every entry, and test any bot with a variable spread, not a flat one.
What the spread is
Every market has two prices at any moment. The bid is the highest price a buyer will pay, so it is where you sell. The ask is the lowest price a seller will take, so it is where you buy. The ask is higher than the bid. The gap is the spread.
Cost of a round trip = spread x value of one price unit x size
You pay it by default. A buy fills at the ask, and when you close it fills at the bid. If the market has not moved at all, you are down by exactly the spread. Some accounts show the spread inside the price, and others charge a smaller spread plus a commission. Either way the cost is real, and it arrives before the trade has done anything.
When it widens
- News and data releases. Sellers pull orders until the number is out, so the gap opens, sometimes by several times its normal size.
- The daily rollover. Around the end of the trading day in many forex accounts, liquidity thins and spreads often widen sharply. The time depends on the broker.
- Thin hours and thin instruments. Few participants means few orders near the price, so the gap is wider. Overnight sessions, holidays, exotic pairs and small coins all show it.
- Fast markets. When prices move quickly the people quoting prices widen them to protect themselves.
What a given broker or exchange does varies. Read the typical and the maximum spread your account type reports, and check the figure at the hours your bot trades.
A worked example: the yearly bill
Assume a dollar-quoted currency pair where one pip is 0.0001. A position of 10,000 units then moves $1.00 for every pip. This is a made-up setup, and real contract details vary by instrument and account. The spread is 1.2 pips.
Cost per year = round trips per day x 252 days x $1.20
The table shows what that adds up to. Calculated by us on 27 Oct 2026, exact.
| Round trips per day | Cost per day | Cost per year (252 days) | Share of a $2,000 account |
|---|---|---|---|
| 1 | $1.20 | $302.40 | 15% |
| 5 | $6.00 | $1,512.00 | 76% |
| 10 | $12.00 | $3,024.00 | 151% |
| 20 | $24.00 | $6,048.00 | 302% |
| 50 | $60.00 | $15,120.00 | 756% |
A bot trading 10 times a day pays $3,024.00 a year in spread alone on this one 10,000 unit position, which is 151 percent of a $2,000 account. It has to earn that back before it makes a cent. A bot trading once a day pays $302.40, about 15 percent. Frequency is the multiplier, and size is the second one: double the position and the bill doubles.
The same bill at different spreads
Spreads change by account and by hour. At 10 round trips a day for 252 days on the same position:
| Spread | Cost per round trip | Cost per year |
|---|---|---|
| 0.6 pips | $0.60 | $1,512.00 |
| 1.2 pips | $1.20 | $3,024.00 |
| 3.0 pips | $3.00 | $7,560.00 |
A spread that widens from 1.2 to 3.0 pips for part of the day more than doubles the cost of the trades taken in that window. Averaging the spread over the day hides it, because the bot may trade more during the wide hours, for example when a news-driven signal fires.
How it hits each kind of bot
- Grid bots. A cycle earns about one grid spacing and pays the spread once. With 10-pip spacing and a 1.2 pip spread, 12 percent of each cycle goes to the spread. At 3 pips, it is 40 percent, which is why very tight grids often fail after costs. See the grid calculator to size spacing.
- Scalpers. Targets of a few pips are the same story: the spread is a fixed amount, so it takes the biggest share of the smallest target.
- Martingale bots. Each added step pays another spread, and the larger steps pay it on larger size. The cost grows with the ladder.
- DCA bots. Fewer trades, so a lower total. The spread on thin coins can still be a large percentage on a small buy.
- Bots that trade at the rollover or on news trade when the spread is widest.
How to check for it
- Log the spread at every entry and exit. The average spread and the spread at the moments the bot trades are different numbers.
- Test with a variable spread. A backtest with a flat spread is the optimistic case. Rerun it with a wider spread during the hours where yours widens, and with double the average.
- Work out the break-even. The break-even calculator shows how many units a trade must move before it covers its costs.
- Add slippage. Spread is the known part of the cost, and slippage is the variable part. Both belong in the expected value.
What it does not tell you
A low quoted spread does not mean low total cost. Commission, swap or financing charges, and slippage are separate. A low spread in a quiet hour says little about the spread at the news release. The example above also assumes a dollar-quoted pair and a 10,000 unit position. The same arithmetic works for other products, but the value of a pip or tick will differ, so use your own contract details.
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FAQ
Frequently Asked Questions
Do I pay the spread once or twice?
Once per round trip, in effect. You buy at the ask and sell at the bid, and the gap between them is the cost. Some accounts show it inside the price and others add a commission to a narrower spread.
Why does the spread widen at the rollover?
Liquidity thins as the trading day changes over, so there are fewer prices on offer close together. The exact time and size of the widening depend on the broker and the instrument.
Is a fixed spread better than a variable one?
Neither is better in general. A fixed spread is predictable, and a variable spread is often narrower in calm hours and wider in fast ones. Check the terms and test your bot against the widest the account allows.
How do I include spread in a backtest?
Use real historical spreads if the data has them, or a spread that varies by time of day. A single flat average will understate the cost at the hours that hurt most.
Does a tight grid pay more?
It makes more cycles, and each pays a larger share to the spread. Whether the total is higher depends on the numbers, which is why the cost per cycle should be calculated before choosing a spacing.
Are the numbers on this page real?
Example numbers are made up to show how the maths works, and the page says so. A figure only counts as exact when the page says it was calculated on a stated date. Nothing you enter in a calculator leaves your browser.
Can I use this to decide whether to run a bot?
It can show whether a bot's numbers hold together and how much an account can lose. It cannot say what the market will do, and it is not advice. Use it to ask better questions, then read the terms of your own broker or exchange.
Is this financial advice?
No. It explains a trading cost in general terms. The position and spread figures are a made-up setup with exact arithmetic.
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