Identify the price you are looking at
The bid is the price buyers currently offer; the ask is the offered selling price. The spread is ask minus bid. An immediate purchase usually takes the ask side and a sale the bid side. That does not promise that the required quantity will fill at the best displayed price.
A chart may show the last transaction, the midpoint between bid and ask, or another selected price basis. We use the midpoint here. Before comparing a result with a candle, check the price source, time, currency and number of units.
An educational quote and 10 units
All prices are fictional, the instrument is hypothetical and the currency is USD. The initial bid/ask is 99.90/100.10; the final quote is 101.90/102.10. The midpoint rises from 100 to 102. Assume sufficient quantity and exact executions: buy at 100.10 and sell at 101.90. There is no additional slippage in this case.
For 10 units, the midpoint change would represent USD 20. Actual gross profit is 10 × (101.90 − 100.10) = USD 18. The USD 2 difference is already embedded in the entry and exit prices. Do not subtract the spread again from those USD 18.
| Time | Bid | Ask | Midpoint |
|---|---|---|---|
| Entry | 99.90 | 100.10 | 100.00 |
| Exit | 101.90 | 102.10 | 102.00 |
Commission applies to each actual traded amount
Use an illustrative rate of 0.1% on each side, with no minimum fee. The purchase amount is 10 × 100.10 = USD 1001, giving a USD 1.001 commission. The sale amount is 10 × 101.90 = USD 1019, giving USD 1.019. This is a teaching assumption, not a broker’s tariff.
Total commission is USD 2.02. The result after these fees is 18 − 2.02 = USD 15.98. Intermediate precision is retained in the table. Actual rounding, minimum commissions and extra charges depend on the service terms.
| Side | Quantity | Execution, USD/unit | Traded amount, USD | Commission, USD |
|---|---|---|---|---|
| Buy | 10 | 100.10 | 1001.00 | 1.001 |
| Sell | 10 | 101.90 | 1019.00 | 1.019 |
10 × (101.90 − 100.10) − 1001 × 0.001 − 1019 × 0.001 = 15.98 USD
Slippage changes the execution prices themselves
Keep the displayed quotes but assume a purchase at 100.12 and a sale at 101.88. Each side is USD 0.02 worse per unit. For 10 units, gross profit differs by USD 0.40. The companion article on liquidity explains why quantity and available depth matter.
At the new prices gross profit is USD 17.60, commissions are 1.0012 + 1.0188 = USD 2.02, and the result is USD 15.58. When using actual execution prices, do not deduct the spread or the same USD 0.40 of slippage again.
| Case | Buy | Sell | Gross, USD | Fees, USD | Result, USD |
|---|---|---|---|---|---|
| No additional slippage | 100.10 | 101.90 | 18.00 | 2.02 | 15.98 |
| USD 0.02 worse on each side | 100.12 | 101.88 | 17.60 | 2.02 | 15.58 |
What the calculation leaves out
The example excludes tax, currency conversion, financing, exchange charges and other separate fees. It does not model short selling, leverage or partial fills. Distinguish excluded costs from missing information: no row in an educational table does not mean no cost in a real transaction.
A check you can repeat
Write down quantity and currency, then the actual purchase and sale prices. Record the rate, calculation base and amount of each charge separately. Only then compare the result with the chart price. This makes discrepancies traceable instead of automatically blaming an indicator.
- Check whether the chart shows last price, bid, ask or midpoint.
- Calculate gross profit from executions rather than desired prices.
- Deduct each commission once and list costs left outside the calculation.
- Do not turn one worked example into a promise of future results.
Primary sources
Sources explain the mechanics and limitations; the editorial examples use invented numbers rather than market quotations.
Your next practical step
Student Wyckoff Pro helps you study closed bars and save your analysis. It does not execute trades; access and the Windows connection are explained in the guide.
Open the first-chart instructions ↗