Commission is a fixed charge per trade that some brokers levy instead of, or in addition to, a wide spread. It is most common on raw or ECN accounts, where the broker passes on the spread it receives from its liquidity providers, often close to zero on the majors, and adds a commission of a few dollars per lot to earn its income.
How commission is charged
Commission is usually quoted per lot per side, or per lot round turn. Per side means it is charged once when the trade opens and again when it closes. A commission of $3.50 per lot per side is $7 per lot round turn. Some brokers quote it as a percentage of the notional value instead, and some charge nothing on indices and gold and earn the whole cost through the spread.
In MetaTrader 5 the commission appears as a separate column in the trade history and is deducted from the account at the moment each side of the trade is executed, so the effect is visible in the balance immediately.
Comparing account types
The only fair comparison between a standard account and a raw account is the total cost per trade, spread plus commission, converted into the same unit.
Take one lot of EUR/USD. A standard account with a 1.2-pip spread and no commission costs $12 per trade. A raw account with a 0.2-pip spread and $7 round-turn commission costs $2 in spread and $7 in commission, $9 in total, equivalent to 0.9 pips. The raw account is cheaper, but only by 0.3 pips. On a pair with a wider raw spread, or with a higher commission, the order can reverse. Brokers know that many traders compare spreads alone, and price accordingly.
Cost against average profit per trade
The number that decides whether a strategy can survive is the ratio between its total cost per trade and the average profit per trade before costs. A strategy averaging 5 pips a trade before costs, paying 0.9 pips, keeps 82 per cent of its edge. The same strategy paying 1.5 pips keeps 70 per cent. A strategy averaging 1.5 pips before costs and paying 0.9 keeps 40 per cent, and at any realistic widening it keeps nothing.
Costs scale with trade frequency, not with account size. A system that trades twice a week pays its costs a hundred times a year. A system that trades ten times a day pays them 2,500 times a year, and needs an edge per trade twenty-five times as large to end up in the same place.
Two strategies each make 200 pips a year net of nothing on one lot. The first takes 50 trades of 4 pips; the second takes 400 trades of 0.5 pips. Both pay a total cost of 0.9 pips per trade. The first strategy pays 45 pips in costs and keeps 155. The second pays 360 pips in costs and loses 160. Identical gross performance, opposite results, and the only difference is how often they traded.
An EA should be judged on its results after spread and commission at the broker you will actually use, not on a backtest run at zero cost or at one broker's best-case spread. Reputable vendors state the cost assumptions in any test they publish, and a live record on a real broker feed is the only evidence that the strategy survives them.
When choosing an account for an EA, work out the total cost per trade on the markets it trades, in pips or points, and compare it with the EA's average profit per trade from its live record. If costs are more than a quarter of the average winner, expect a meaningful part of the edge to disappear in live trading. Low-frequency systems that hold trades for days or weeks are largely indifferent to a few tenths of a pip. High-frequency systems live or die by it.