Commission
Definition
Commission is the fee charged by a broker for executing a trade, typically charged per lot or per trade. It's separate from the spread and is a direct cost that reduces your net profit on every trade.
Commission structures vary by broker and account type. ECN/Raw spread accounts charge a commission (typically $3-7 per standard lot round-trip) but offer tighter spreads. Standard accounts have no commission but wider spreads. The total cost (spread + commission) is what matters, not either metric alone.
For prop trading, commissions are usually built into the trading conditions of the firm's broker. Some firms use raw spreads with commission, while others use standard spreads with no commission. Calculate your total cost per trade (spread + commission) and factor this into your profitability calculations.
High-frequency traders and scalpers are most affected by commissions because they make many trades per day. A commission of $7 per lot round-trip across 20 trades per day at 2 lots each = $280 per day in commission alone. PropJournal tracks all commission costs and factors them into your performance metrics.
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