Can I be a profitable trader?

Discussion in 'Trading' started by dafong, Feb 12, 2009.

  1. dafong

    dafong

    So for the last 3 months, I've been day trading, but only making 3-4 trades a day trading the 500 shares of the SPY, which is equivalent to one contract of the ES. But anyways, I've been trading on my etrade account and each trade is 7.99. I looked at my performance for the last 3 months and i'm break even, but i've racked up commissions of over 5000. By switching to a per share basis commission broker, let's say IB, they charge .005 per share which is 2.50 for 500 shares. This would lead me to believe that I could be profitable with the lower commissions. Should I have any doubts?
     
  2. Brandonf

    Brandonf ET Sponsor

    Back in the mid late nineties when I started trading commissions ran about $50 in and out. I'd started with $25,000 and ran the account down to around $10,000 very quickly, when I looked at my results I discovered I'd actually made about $600 trading, but I had paid over $15,000 in commissions to do it, so my result was a loss. Back then there still where not many per share deals out there, but MBTrading started to offer a deal of $5 for 300 shares, so I quickly changed my brokerage firm from the Executioner to MBTrading, and that was a big part in the start of my becoming profitable. Obviously once the 2 or 3 months where up I'd be back in the same boat, but what it really did for me was gave me the confidence I needed to not trade so scared. So, I did start to make some money and have continued to after that.
    If your breaking even after the amount of time youve been in the market and are just started out that's a great result. I'd suggest you look at trading the emini's themselves as opposed to the SPY/QQQQ etc, but if you want to stick to the stocks for whatever reason you should definatly switch a per share commission broker for the time being as it will save you a ton of money and probably help you turn the corner.
    Brandon
     
  3. Yes. You should focus more on the distribution of profits and losses you have. If you have many "large" losses in your account, you have to eliminate them from happening again. :cool:
     
  4. pkts

    pkts

    Not sure if I quite understand the question...it seems very basic. If you are charged 14 bucks for a round trip then you made 357 of them so far. At 5 bucks a turn, IB would cost you 1785 and save you 3215. Sure, you'd be profitable then ! :)

    It would be 4.80 with futures plus the advantages of lower taxes and not having a headache with taxes (EG. 50 pages of Schedule D attachment)
     
  5. oriol88

    oriol88

    by no means
     
  6. any amount of shares , and very fast executions.
     
  7. Breakeven is better than the majority and it means you are right around the corner to turning green. Why not open an account and cut your commissions and see what happens. The number you gave imply that you would be net positive close to $1000 if you had lower commisisons. My only concern is 3 months is not a very long sample but any time you can reduce your transaction cost without sacrificing quality you should jump on it.
     
  8. the things are not really like that.

    when I was with scottrade, they charged round-trip $14.0+, I made good trades, I plan and treat every trade very carefully, I was able to make good money per trade, almost 100% accurate and profitable, some overnight trade even made 200% gain. i hate scottrade's platform, can not execute it on time, that created lots of problems for me.
    so I switched to IB, but oddly, I did not make much more than in scottrade, and I traded more often, i found I executed lots of lousy trades:wtf:verttrade, produced lots of commision costs, end up worse than in scottrade.

    the point is: commision is not the problem, the platform is not the probem, the problem is in your discipline/plan.
     
  9. ...cheaper broker..why not..many hurdles ahead ..years to go.
    Lower your overhead...trade under a registered business name, get a reliable service , deduct from your taxes..equipment and learning material