Costs, slippage and currency

The real-world frictions a paper account leaves out. · about 4 min

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General education only. Not financial, tax or legal advice.

Real trading has costs that quietly erode results, especially for small, frequent trades.

• Brokerage – a flat fee or percentage per trade, on the way in and the way out.
• Spread – the gap between the buy price and the sell price. Illiquid shares and small-cap crypto can have wide spreads.
• Slippage – getting a worse price than you saw, common in fast markets and with market orders.
• Currency conversion – buying US shares from an Australian account usually involves converting AUD to USD, often with a fee or a margin on the exchange rate. Check your broker’s rates.
• Tax – see the tax lesson.

Our desk values every asset 1:1 in virtual dollars with no fees, no spread, and no currency conversion. Use the position-size calculator’s fee box to see how costs eat into your risk budget.

Key points

• Costs hit small, frequent trades hardest.
• Spread and slippage are hidden costs.
• The desk ignores fees, spread and FX; real trading doesn’t.

Checklist

Tick these off as you practise (saved in this browser).

• I added brokerage to the calculator’s fee box
• I know which of my assets would involve currency conversion
• I understand paper results exclude all costs

Quick quiz

Pass mark: 2 out of 3. You can retry as often as you like.

1. What is the “spread”?

The broker’s monthly fee The gap between the buy and sell price A type of order

2. Buying US shares from an Australian account often involves:

Currency conversion with a possible fee No cost at all Only paying tax

3. Does the paper desk model fees and slippage?

Yes, fully No, it does not Only for crypto

Check answers