Trading costs & metrics, explained.

Required leverage is the lowest leverage a broker must offer for your trade to be placeable at all. It depends only on your strategy, not the broker.

PipRival surfaces this above the ranking and flags brokers that fall short. You can also try the dedicated required leverage calculator.

You cross the bid–ask spread once entering and once exiting, so the full spread is paid on every round-trip trade.

On a standard account this is your whole trading cost; on a raw account the spread is near zero and the cost moves into commission.

Commission is quoted per lot, per side (a half-turn). A full trade opens and closes, so you pay it twice.

Raw/ECN accounts carry most of their cost here in exchange for a much tighter spread.

Swap (overnight financing) is charged for each night a position is held past the broker's rollover time. It only applies to multi-day (swing) trades.

Turn on Swing mode in the comparison tool to fold swap into each broker's cost and expectancy.

An intraday strategy opens and closes every position within the same trading day, never holding overnight. Because nothing is carried past rollover, intraday traders pay no swap (overnight financing); their costs are spread and commission only.

Scalping and day trading are intraday styles, typically using tight stops and a higher number of trades.

A swing strategy holds positions for days to weeks to capture larger moves. Trades are held overnight, so swing traders pay swap on every night a position stays open, on top of spread and commission.

Swing trading usually means wider stops, fewer trades, and a greater sensitivity to overnight financing, which is why PipRival has a dedicated Swing mode.

A stop-loss is a pre-set order that automatically closes a losing trade at a defined price to cap the loss. The distance from your entry to the stop defines the risk on the trade and, together with the amount you choose to risk, fixes your position size.

It is the foundation of position sizing: PipRival uses your stop distance to work out lot size and the minimum leverage your trade needs.

A take-profit is a pre-set order that automatically closes a winning trade at a target price to lock in profit. The take-profit distance divided by the stop-loss distance is your reward-to-risk ratio.

It removes the temptation to hold a winner too long and watch it reverse.

Leverage is borrowed market exposure expressed as a ratio such as 1:30 or 1:500. It lets you control a position notionally larger than your equity, amplifying both gains and losses in equal measure.

Regulators cap retail leverage by region (for example 1:30 in the EU and UK and 1:50 in the US), while offshore brokers and prop firms often offer much more. PipRival shows the cap that applies in each jurisdiction you select.

Win rate is the share of your trades that close in profit: winning trades ÷ total trades. A 50% win rate means half your trades win.

On its own it says little about profitability: a 90% win rate can still lose money if the occasional losers are large. It only becomes meaningful alongside the reward-to-risk ratio.

The reward-to-risk ratio (R:R) compares the distance to your take-profit against the distance to your stop-loss. A 2:1 ratio means your target sits twice as far as your stop, so risking $100 aims to make $200.

Win rate and reward-to-risk together determine expectancy: a strategy can be profitable with a low win rate if its reward-to-risk is high enough, and vice versa.

Expectancy is the average outcome of a single trade, in dollars or in R (units of risk).

It is PipRival's core metric: every broker is ranked by expectancy per trade after its spread and commission are stripped out, so you see whose pricing keeps the most of your edge.

Profit factor is gross profit divided by gross loss across all trades. Above 1 means the strategy made more than it lost; below 1 means it lost money.

Recovery factor is net profit divided by maximum drawdown. It measures how efficiently a strategy earns its return relative to the worst losing stretch it had to endure.

A higher recovery factor means more profit per unit of peak-to-trough pain, a quick way to compare the risk-adjusted quality of two systems.

Drawdown is the decline in account equity from a peak to a later trough, usually shown as a percentage of the peak. Maximum drawdown is the largest such drop over a period and is a core measure of risk.

It captures how much pain a strategy can inflict before recovering, and prop firms often set hard drawdown limits that end a funded account if breached.

The Sharpe ratio measures risk-adjusted return: average return above the risk-free rate, divided by the standard deviation (volatility) of returns.

A higher Sharpe means more return for each unit of risk taken. As a rough guide, above 1 is decent and above 2 is strong, though the value depends heavily on the measurement period.

Volatility drag is the gap between the average (arithmetic) return and the compounded (geometric) return caused by the variance of returns.

For example, a +50% gain followed by a −50% loss averages 0% but compounds to a 25% loss. The bigger the swings, the more compounded growth lags the headline average. See how PipRival handles this in its equity curve limitations and Monte Carlo projection.

A standard account charges no separate commission and builds its entire cost into a wider bid–ask spread. The spread is the only trading cost, which keeps things simple for beginners and lower-frequency traders — but the all-in spread is usually wider than on a raw account.

A raw spread (or ECN) account passes through near-zero interbank spreads and charges a separate fixed commission per lot instead. Because the spread is so tight, total cost is often lower for active traders even after commission.

PipRival models both the raw spread and its commission so it can compare true round-trip cost fairly against standard accounts.

An offshore broker is registered in a lightly regulated jurisdiction such as Saint Vincent and the Grenadines, the Seychelles or Vanuatu. They often advertise very high leverage, tight spreads and low commissions.

The trade-off is that they sit outside major regulators like the FCA, ASIC or CySEC, so traders generally lack the oversight, complaint channels and client-fund protection that regulated brokers provide. PipRival always shows an offshore flag next to the price.

A proprietary trading (prop) firm gives traders access to the firm's capital, usually after they pass a paid evaluation challenge with profit targets and drawdown rules. The trader then keeps an agreed share of the profits.

Prop firms operate outside retail brokerage regulation, and the funded account is typically a firm-controlled or simulated account rather than the trader's own money.

Backtesting applies a trading strategy to historical price data to estimate how it would have performed. It is where traders measure their win rate, reward-to-risk ratio and other statistics before risking real money.

Results are only an estimate: past performance does not guarantee future results, and overfitting a strategy to history is a common pitfall.

A Monte Carlo simulation runs thousands of randomized sequences of trades drawn from your strategy's statistics, producing a distribution of possible outcomes instead of a single projection.

It reveals the range of equity curves and drawdowns that variance can create, the risk a single deterministic curve hides. Try PipRival's Monte Carlo projection of your strategy.

Bootstrapping is a resampling method that repeatedly draws from your actual historical trade results, with replacement, to build a distribution of possible outcomes.

Unlike a parametric Monte Carlo that assumes every trade is a fixed full win or full loss, a bootstrap inherits the true shape of your returns, including partial exits, break-evens and the real spread of win and loss sizes, making it a faithful stress-test of a genuine track record.