getting killed in commissions! best broker/way to lower commissions?

Discussion in 'Index Futures' started by guardiangel, Nov 18, 2009.

  1. i was reading the market wizards and observed what was happening to me (well at least in sim)
    i realize that i have been profitable in almost anything i trade IF COMMISSIONS DID NEVER EXISTED ! then again back to reality, they do and pack a pretty hard punch.
    if i could decrease what i pay its still possible to eek out something :p

    i read a post on here that mentioned that anything above 4.20 r/t is a rip off
    i intend to trade approx 1500 - 2000 monthly
    any suggestions?
  2. learn this method and trade less but smarter

    commissions will not matter so much
    if you do this

    good luck ... this gentleman was a master of making sense of the markets music


    study the markets order flow as well in various time frames

  3. Decide which markets/contracts you'll be trading. Then prioritize what you want from a broker. For example,
    1) do they trade the markets you want to trade? Example: Ticker symbols NQ, 6E, ZN, GC and CL
    2) low commissions
    3) do they offer front-end software that you want? Examples: X-Trader, Ninja Trader, etc.
    4) Other questions (minimums, night desk availability, orders by phone, web trading, connectivity, automated trading, back testing etc)
    Then call brokers and ask them
    1) Do you offer futures trading in E-Mini Nasdaq 100 Index, Euro FX, 10 Year U.S. T-Note, Gold, and Light Sweet Crude Oil.
    2) I plan to open an account with $XXK and trade about 1,000 round turn trades per month, what would you charge me to trade each of these contracts (round turn, all in, including all exchange fees)
    3) Do you offer XYZ front end software?
    4) Other questions, minimum to open account, monthly fees, inactivity fee, data feed fees, connectivity fees.
    No broker is the best fit for all clients. You need to find the one that best matches your NEEDS and WANTS. The brokers which are sponsors at the bottom of the ET home page are a good place to start. Doing a little bit of homework first will save you a lot of commissions, frustration and time later on.

  4. Sim trading is good practice, but don't be fooled by the results. If you're barely able to "eek out something" in sim, you'll lose money when you go live because you get better fills in sim that you do in real trading. Lower comissions are definitely a good thing, but they don't solve underlying trading problems.

    I learned the hard way that sniping all day long makes my broker rich and I end up with nothing. I trade the ES and CL using strict rules to avoid overtrading.

    As an example, I trade ES using these simple rules: (a) If I make 5 points, I quit for the day. (b) If I lose 5 points, I quit for the day. (c) After five trades, no matter how much I've made or lost, I call it a day. (Note: If I'm in a runner going in my favor, I don't close the trade just because I made my five points. If a trade wants to go farther, I'll let it run, but tighten my stops.)

    I'm very SELECTIVE about which trades I take. That is the key -- WAITING for the best trades. That is my psychological challenge -- to be PATIENT.

    Some days I only trade once or twice. Those are usually my best days -- make lots of money, give very little to my broker.

    My trading style does NOT maximize profits (because profitable trades are missed when I'm out of the market), but it does maximize my psychological FOCUS and DISCIPLINE. Trade less. Make more. For me, that is the key to profits. Low commissions are a good thing, but not the difference between success and failure.

    I hope this helps you. Good luck.
  5. joe4422


    One thing you should do right away is lease a seat to get your commissions down. If you're doing that high volume, you can definetly get your broker to give you a deal as well. Talk with a big broker like interactivebrokers, or transact.
  6. NKNY


    You can prob get low 3's RT at global...
  7. 4XQs


    Everyone from sell side, whether they're brokers, IBs etc are very quick to downplay the importance of commissions. However, they're only right if your timeframe is so high that you're not really 'trading' anymore but rather investing.

    Once your positions turn more than a few times a day I would say commissions becomes more and more important the more frequently you trade. If you're into futures, you should definitely consider a membership as soon as your volume warrants it.
  8. NKNY


    Curious What's a membership cost these days and how low can commissons get as a member ?

  9. trade longer time frames, check your past trading results and see if any kind/instrument of your trades could be reduced/eliminated, etc.