Start with the two-way quote
The spread is the difference between the bid and ask. If an illustrative quote is 1.0800 / 1.0802, the difference is two pips for a pair using a 0.0001 pip size. With no price change, buying at the ask and immediately selling at the bid produces a loss equal to that difference, before any other charges.
A worked cost estimate
Suppose a simulated position has a value of 0.50 dollars per pip. A two-pip spread corresponds to one dollar in the immediate round-trip illustration. If the account also charges 0.40 dollars to open and 0.40 dollars to close that position, the combined spread-and-commission estimate becomes 1.80 dollars. These numbers are invented for the calculation and do not describe a provider's current price list.
Read the pricing model
Some accounts charge a separate commission; others incorporate more of their charge into the spread. OANDA documents a spread-plus-commission model, illustrating why a low headline spread is not a complete comparison. Check the exact entity, account type, instrument and position size when reading a fee schedule.
OANDA: spread-plus-commission pricing mechanics
Holding a position adds another question
Check whether overnight financing, rollover adjustments or other holding charges apply to the product. The treatment may depend on direction, instrument, holding period and provider terms. Record the actual debit or credit from your statement rather than assuming it is zero or constant. Include any account-currency conversion charge separately.
Do not count the spread twice
When a trade log already calculates results from the actual entry and exit execution prices, the spread's effect may already be included. Subtracting a second estimated spread can distort your result. Keep actual fills and separately charged fees in different columns, then explain how your net result is constructed.
Build a useful practice ledger
For ten demo trades, record bid and ask at entry, executed entry and exit prices, size, commissions and holding adjustments. Compare the estimated cost before entry with the final result. An unexplained difference is a question to investigate, not a reason to rewrite the record. Cost estimates should travel with any backtest you later compare against these observations.
Sources and further reading
OANDA: spread-plus-commission pricing mechanics
Educational material, not a recommendation to trade. Examples are hypothetical. Leveraged products can produce substantial losses. Source links provide context and do not imply an endorsement of ELITE FX HUB.