Trading fee
A trading fee is what an exchange charges to execute a trade, usually a percentage of its size, such as 0.1%. You pay it on every buy and sell, so frequent trading eats noticeably into profit.
How it works
The fee is charged on the trade value, not on the profit. Buy $1,000 at 0.1% and you pay $1; sell and you pay another $1. The rate depends on whether you are a maker or taker, your 30-day trading volume, and sometimes on paying fees in the exchange's own token.
On futures the fee is charged on the full leveraged position size. A $10,000 position opened with $1,000 of margin pays fees on $10,000, so relative to your margin it is 10 times heavier. Perpetual futures also have a separate payment, the funding rate.
Besides the trading fee there are other costs: the spread, slippage, withdrawal fees and currency conversion fees. The real cost of a trade is all of them added up, and that is what belongs in your profit math.
A scalper makes 10 trades a day of $2,000 each at a 0.1% taker fee. Each trade has an entry and exit: $2 + $2 = $4. That is $40 a day and $800 over 20 trading days. On a $5,000 account that is 16% a month you must earn back just to break even.
The mistake is ignoring fees because "0.1% is nothing". With frequent trades and leverage they add up and turn a strategy that is profitable on paper into a losing one. Include fees in every backtest and trade journal, use limit orders where you can, and do not overtrade.
Questions and answers
What is a trading fee in simple terms?
It is what the exchange charges for each trade, usually a small percentage of the trade size. You pay it when you buy and when you sell.
How do I calculate a trading fee?
Multiply the trade size by the rate. For example, $500 × 0.1% = $0.50. On futures the size is the full leveraged position.
How can I reduce trading fees?
Use limit orders (the maker rate is usually lower), trade less often, and on some exchanges the rate drops with higher volume or when paying fees in the exchange's token.
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Updated: 2026-10-19