What is a good ratio between your trading income and commision?

Discussion in 'Professional Trading' started by mrfong8, May 27, 2005.

  1. mrfong8


    i don't know if there is a good measure for this question.

    let say if i make x amount a year trading after commision, and also pay about the same in commission. Is a 1 to 1 ratio considered efficient?
  2. timbo


    Commissions are dirt cheap.

    I would be more concerned with the b/a spread. May be the MM's, dealers, and the likes will get the hint - someday.
  3. It depends on whether you're a scalper or more of a position traders.
  4. Any opinion if you are a scalper?
  5. kubilai


    I position trade stocks and get about 7:1 for the last year, before that I was a consistent loser.
  6. I'd like to see 10:1 on average. For instance, average gain of 10cents per share with 1 cent/share commission.

    Having 10% fixed overhead is reasonable., imo. I would worry if my edge fell below 5:1
  7. lmao most on here would spend 400k of commissions if they could make 400k. thats 1-1 and few would poo poo at that. bottom line is your net. if its takes 1 million in commission to mke 500k neet thats great.now if you spend 1 million in commissions and net lose anything you're overtrading
  8. lescor


    Agreed. This topic has been discussed in the past and the people who try to make the argument about "efficient" trading are missing the point behind trading to begin with, namely net profits.

    Would you rather gross $100k and pay only 5% in commissions or gross $5M and pay 95% in commissions?
  9. j1900q


    They get about 7% from me. Not too bad .
    I use IB so can't do much better.
  10. If you can do that ... that's impressive. It just seems to me that your edge vs cost is so thin that even the smallest of mistakes or change in market will put you in the red. I would not trade a strategy with such a thin edge, but if you can ... best of luck.
    #10     May 28, 2005