MYTH #4 FOREX does not have any middlemen, and stock market has a lot. MYTH #5 FOREX has no commissions or they much lower than on stock market. Both True But I prefer to say that in a bit other way. Middlemen on FOREX are greatly cheaper than on the stock market. The stock market has some types of fees not seen in the FX market. Because the stock market is exchange traded market, the Exchange itself collects fees from client’s turnover. You can pay only these exchange fees if you will buy an exchange membership. But it’s very expensive, for example, according to NYSE data, the cost of membership in 1999 fluctuated between $2mln and $2.65mln. That’s why most individuals trade stocks via different brokerage companies. But the price for that is an additional brokerage fee. Besides the exchange fee and brokerage fee, some brokers have a custodian fee. This fee is for booking and servicing your shares packs (for example, servicing such procedures as splitting of shares, dividends payout, or just for keeping them, etc). The amount of fees and commissions vary amongst the brokers and depends from some factors, such as full-service broker vs. discount broker, your assets value and turnover etc. But average brokerage fees are between 0.19-0.35$ per share. For example if you buy 100 Google shares for $500 per share and sell for $501, you will get profit of $100 but pay a fees between $38-70 (because of fee demands for both part of trade – buying and selling). Of cause, may be if you will show large turnover, your fees will become lower, but even 0.05$ per share is not very cheap. On the FOREX market, there is a quite different story. Although I think that retail brokers are still middlemen between public and large banks, in the majority cases your expenses are just built into the bid/ask spread and not any additional fees. Due to the extremely high level of competition between FX retail brokers, this spread has gradually become tighter. Now it’s about 0.0002-0.0005 (2-5 pips) in quotes for major pairs. If, for example, current EUR/USD quote is 1.3050, then even 0.0005 spread is just a 0.04%! The highest spread, i.e. expenditures on the FOREX market are at least 2-2.5 times less than the lowest expenditures on stock market.