July 12, 2010
Day trading commissions?
By Planet Wealth
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I was hoping to get into day trading in the future and make profits on very small percentage moves, but was just wondering how this would be possible when the factor of commissions is coupled in?
Generally, what kind of percentage return do day traders make on each trade?
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Topics: Day Trading | 4 Comments »
4 Responses to “Day trading commissions?”
Comments
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July 12th, 2010 at 3:16 pm
You are obviously a novice. Why daytrade on small percentage moves. If you trade in volatile sectors, you can day trade with stocks that swing quick 5-10% with the right strategy. Regardless, you will need an online account. Beware, you have a lot of studying to do with what you have written. You can’t buy, and "hope" a stock will go up. There are strategies where you can reduce your risk, and profit 5 – 10% several days a week.
July 12th, 2010 at 3:16 pm
There are some online brokerages that are very affordable. I lost $4000 when the tech bubble burst day-trading, but I loved e*trade. Excellent luck. Look at Ford for speculation gains in fourth qtr.
July 12th, 2010 at 3:16 pm
No simple answer to it. First of all, one has to assume that a trader is profitable at all. Than it depends on strategy and money management involved. Day trader can look for trades lasting few hours, or just few minute.
That said, experienced and professional day traders, with some track record would target about 0.5%-1.0% return per trade. Maybe even a small less. And yes, commission cost, while vital, can be overcome. Very excellent of you to take that under consideration, because most people don’t even reckon about. Mistake, because the shorter trades, the more vital commission costs become.
July 12th, 2010 at 3:16 pm
At TerraNovaOnline, it is not uncommon for their clients to trade more than 200 times a day – commissions definately become a factor.
Nobody knows the answer to your question. It can only start to be defined when you try trading vs investing, and start to learn for yourself who you really are, what makes you tick, what makes you run, what makes you dread and what makes you greedy. You have many things to unlearn, and we all have many psychological hangups to uncloak. Unless you choose to devote your life to trading, you will never learn the answer. There are simply too many variables, and your question is too broad.
If you look at the statistics, 80% – 90% of all beginning traders blow out. Some say the number is closer to 95%. If you read the book Market Wizards, you’ll find that most of them, all top traders in the industry, have lost everything at least 3 times and started over 3 times before they finally re-learned what truth is, how to be honest with themselves, how to take emotion out of it, how to stand firm when you want to run, and how to fit into the multiplicity of time frames.
We are all just looking for a small edge to tip the odds in our favor, and use excellent money management and Stops as the gospel.
You will come closer to your answer when you are able to define risk and use it to your advantage. Forget the conventional method of a linear 45-degree line chart between risk and potential – hogwash.