Scalping: why costs decide the outcome
What you learn in 3 minutesThis lesson is about the cost of a single pip and why it decides the outcome of scalping. On EUR/USD around 1.0850, one pip on one standard lot is 10 units of the quote currency, which is about ₱580 when converted at the current rate. If you aim for 3 pips per trade and the spread is 1.2 pips, the spread is most of your result, not a small detail.
20 trades at 3 pips with a 1.2 pip spread
| Step | Amount | Note |
|---|---|---|
| Gross pips per trade | 3.0 pips | The move you aim to capture before costs |
| Spread cost per trade | 1.2 pips | The difference between bid and ask, quoted by the broker |
| Net pips per trade | 1.8 pips | 3.0 minus 1.2 |
| Net pips over 20 trades | 36 pips | 1.8 multiplied by 20 |
| Value of one pip on one standard lot | ₱580 | 10 units of the quote currency at the current exchange rate |
| Gross result before costs | ₱34,800 | 3.0 pips multiplied by 20 trades, then multiplied by ₱580 |
| Spread cost over 20 trades | ₱13,920 | 1.2 pips multiplied by 20 trades, then multiplied by ₱580 |
| Net result after spread | ₱20,880 | 36 pips multiplied by ₱580 |
The broker may round the pip value, charge a commission on top of the spread, or quote a wider spread at busy times. These figures vary between brokers, so check the contract specifications before you trade.
The mistake people make here
Many beginners count the full 3 pips as profit and ignore the spread until the statement arrives. They also forget that commission can be charged on top of the spread, which makes the real cost higher than the chart shows. The fix is to subtract the spread and commission from every target before you decide if the trade is worth taking. If the spread is 1.2 pips and you aim for 3 pips, you are keeping 1.8 pips, not 3.Check yourself
If you make 20 trades at 3 pips each and the spread is 1.2 pips, how many net pips do you keep?
20 multiplied by (3.0 minus 1.2) equals 20 multiplied by 1.8, which is 36 pips.
At ₱580 per pip on one standard lot, what is the spread cost over those 20 trades?
1.2 pips multiplied by 20 trades equals 24 pips. 24 multiplied by ₱580 equals ₱13,920.
What is the net money result after the spread on those 20 trades?
36 net pips multiplied by ₱580 equals ₱20,880.