The four costs
The spread is the difference between the price at which you can buy and the price at which you can sell. You pay it on every trade. The commission is a fee charged by some brokers per lot or per trade. Slippage is the difference between the price you expected and the price you got, which grows when markets move fast. The swap is the interest paid or earned for holding a position overnight.
Measuring cost in R
The simplest way to understand the effect of a cost is to express it in R, the distance from entry to stop. If the spread is 1.2 pips and the stop is 12 pips away, the spread costs 0.1 R on every trade. A strategy with an expectancy of +0.15 R before costs is left with +0.05 R after the spread.
The same spread on a 30 pip stop costs only 0.04 R. This is why strategies with small stops, such as scalping, are the most sensitive to costs, and why a result that looks fine on a long time frame can disappear on a short one.
Slippage and news
Slippage is small in calm markets and can be large around news releases or at the open after a weekend. A stop order does not guarantee the price you set. In fast markets it is filled at the next available price, which can make a loss larger than 1 R.
Why raw results stay useful
ATLAS shows raw results in its signal statistics and in the community store, without spreads, commissions, swaps or slippage. Each broker has different conditions, and a common raw basis makes strategies comparable with each other. The strategy lab lets you add your own spread, slippage and fees to a test, so you can see what is left once your own costs are included.
The gap between the raw result and the result after costs is itself informative. A strategy that survives realistic costs with a comfortable margin is more credible than one that only works in the raw version.
Find your own costs
Look at the typical spread of your broker on the markets you trade and at the times you trade them, and check the commission schedule. Costs differ between brokers, account types and hours of the day, so the numbers that matter are yours.
Frequently asked questions
Does ATLAS include costs in its statistics?
The platform statistics and store measurements are raw. In the strategy lab you can add your own costs to any test.
Which strategies are most sensitive to costs?
Those with small stops and many trades, because the cost of each trade is a larger share of the risk.
See it in ATLAS
Strategy Lab
Describe a strategy in plain words or paste a Pine Script; ATLAS turns it into rules and measures it.
Signal Statistics
Buy or sell: which strategy works best, on which timeframe and on which market.
Strategy Store
Strategies published by the community, measured by the ATLAS engine with raw results.
Terms used in this guide
Spread, Slippage, Swap, R multiple, Expectancy, Pip.
More guides
This guide explains methods and arithmetic. It is not financial advice, and past results do not guarantee future ones. Read the risk disclosure.
