IC Markets
You click buy, the trade opens, and it is already showing minus USD 12. Nothing went wrong. Every trade starts at a small loss equal to your cost of entering: the spread you just crossed, plus any commission charged upfront. This guide shows exactly where that number comes from and when it should make you look closer.
You bought at the ask, but the trade is valued at the bid
When you open a buy, you pay the ask price. Your open position is then marked at the current bid, because that is the price you would get if you closed it right now. The ask is always higher than the bid, and the gap is the spread. So a fresh buy is instantly down by the spread, before the market has moved at all. A fresh sell is the mirror image: you sold at the bid and it is marked at the ask.
A worked example
| Item | Value |
|---|---|
| EUR/USD ask (your buy price) | 1.08512 |
| EUR/USD bid (mark price) | 1.08500 |
| Spread | 1.2 pips |
| Position size | 0.50 lots (USD 5 per pip) |
| Opening loss from the spread | -USD 6.00 |
| Commission (USD 3.5 per side, 0.5 lots) | -USD 1.75 |
| Total shown immediately after opening | -USD 7.75 |
The market has not moved. That minus USD 7.75 is purely the cost of getting into the trade, and you will pay the other half of the round-trip picture (the closing spread is already reflected, commission on the close) when you exit.
When the opening loss is bigger than expected
- You opened during a spread widening. Around news or the rollover the spread can be many times its normal size, so the opening loss is larger. Check the time against the economic calendar.
- Slippage on a market order. In a fast market your fill can be a fraction worse than the price you clicked, adding to the opening loss. This also works in your favour on other trades.
- A wide-spread instrument. Gold, exotics and indices have much larger spreads than EUR/USD, so the opening loss on the same lot size is bigger.
- A large position. The opening loss scales with size. Half a lot on a 1.2-pip spread is minus USD 6; five lots is minus USD 60.
Owen panicked when a gold trade opened at minus USD 45. The spread on gold at that moment was 45 cents and his position was 1 lot (USD 10 per 10 cents, so about USD 45 for the spread). It was not a bad fill; gold simply has a wide spread, and this was a thin session too. Owen now opens gold trades during the London and New York overlap, where the spread and therefore the opening loss are smaller.
An opening loss equal to the spread plus commission is normal and unavoidable. Build it into your plan: your take-profit needs to clear the full round-trip cost with room to spare for the trade to be worthwhile.
It also affects your risk-to-reward
The opening cost shifts your real risk-to-reward ratio against you slightly. A trade planned with a 20-pip stop and a 40-pip target looks like 1:2, but after a 1.5-pip round-trip cost it is closer to 21.5 pips of real risk against 38.5 pips of real reward, about 1:1.8. On a wide-spread instrument the effect is larger. When you assess whether a setup is worth taking, use the cost-adjusted numbers, not the raw chart distances, and favour setups where the target is several times the cost rather than a small multiple of it.
Every trade opens in the red by the cost of entering it. On EUR/USD that is a pip or so; on gold in a thin session it can be 40 cents or more. If the opening loss is bigger than you expect, check the time for a news release or the rollover, check the instrument's normal spread, and check your position size. It is arithmetic, not the broker.
Frequently asked
Why does my forex trade open at a loss?
You cross the spread on entry. A buy is opened at the ask and immediately marked at the lower bid, so it shows a loss equal to the spread before the market moves. Any commission charged on entry adds to it. A sell is the mirror image.
How big should the opening loss be?
Roughly the spread times your pip value, plus any upfront commission. On EUR/USD at 1.2 pips and a 0.5-lot position that is about USD 6 from the spread. On gold or an exotic in a thin session it is much larger.
My opening loss was larger than usual. Why?
You likely opened during a spread widening around news or the rollover, took slippage on a market order in a fast market, or traded a wide-spread instrument like gold. Check the time against the economic calendar and the instrument's normal spread.
Does the opening loss mean I made a bad trade?
No. It is the fixed cost of entering. Whether the trade is good depends on where it goes from there. Set your take-profit far enough away to cover the round-trip spread and commission with margin to spare.
Can I avoid the opening loss?
Not entirely, since the spread is unavoidable. You can minimise it by trading tight-spread majors during peak liquidity, using a raw account and comparing spread plus commission, and staying out around news and the rollover.