Commissions adds up in the long run

this topic has been beaten to death. here are the two most popular options. i prefer the first one since the second one means you have to pay the thieves in d.c. SE tax which in a lot of cases wipes out any benefit from reduced commissions.

trade less (increase reward/risk ratio)
reduce commission costs (switch brokers and/or lease/buy seat on exchange
 
I thought this should be obvious. Commissions, slippage and spreads are what causes most retail traders to fail, they have a 50% chance of being right when they make a bet on direction but these things cut their "odds" to under 50% in the long run. Only traders with a real edge can beat these odds.
 
Another suggestion, don't leverage up. One contract of ES is about $60k nominal (assuming ES at around 1200). Wait till you have that much in your trading acct. If you're paying about $1k per year in commission, then that only works out to less than 2% of your account.
 
Just reread your post, are you actually trying to trade to capture 1 large point or even less? If so, that is insanity.

Capturing big moves can make you rich, the small moves will make your broker rich!
 
dumb_mother,

32 cents/contract, is that per side or RT, how many RTs/month are you doing?

To the other poster,
Bid ask spread also needs to be taken into acount. Now I go for larger targets and stop losses so the bid ask spead and commission affect less my results than they used to.

I moved from ES trading for 4-5 ticks, to ZF with much bigger targets (15-16 ticks), the ATR of ZF is much smaller than ES, so when I reach my target on ZF this is really a big move compared to the ATR.


I know a trader at a prop shop who trades 130 bunds per clip at EUR 10 per tick, he averages over 10,000 RT / day, or 200,000RT /month.
Any idea what this guy might pay in commission with X trader at a prop shop, I would imagine something under EUR 0.5/RT, but I really don't know how much he pays in commish. He trades for 1 tick target and does a lot of scratches. If he pays EUR 0.5 to make EUR 10, target = 20*commish.

I aim for at least target = 40*commish.
If I pay USD 2.7 RT as a retail trader on ZF, I aim for at least 14 ticks target (14*7.8125 = usd 109) = 40*commission
 
i'm not sure what my monthly RT's are because it changes as i ramp up my size, you only need to average something like 100 RT/day to make leasing a seat profitable. my breakdown is 5/5/6 for the commissions and i have membership to lower the fees to that level.
 
you can use numbers to prove anything, as long as you come up with them.
If you are a profitable trader - i.e. can be profitable at the end of the day.... commission like IB's don't matter ...
 
na a seat lease is somewhere around 800$ / month and it saves 50 cents per RT in fees... so 1600 / month is break even which is even less than 100 RT/day.

yeah i just trained a friend of mine to trade and he's going to start trading real money next week and we are starting him off w/a lease because day 1 it still pays for itself.

we get 5/5/6 w/out the lease it is 30/5/6 a side
 
You must log in or register to reply here.
Back
Top