We have all heard the famous saying that the devil is in the details. That is deffinately true in case of trading and investing.
Where exactly? The answer is in the trading fees.
Most of you probably do not turn much attention to this, but I have come to notice that the costs are huge and that is especially the case with small accounts such as mine.
I’ve battlered with this in both trading and investing. When I first did statistics of how much I win or lose per trade, I discovered that I win 35% of the time, but my wins were usually bigger than my losses.
Overall I was bleeding cash, but I found out that one of the biggest reasons for my failure was the trading costs. I was paying 6.95 per trade and on an average day I did 5 round trip trades on average. That amounted to 35$ per day. My account was 2000$ so it means that I lost almost 2% per day on trading costs alone.
That is some sick statistics if you think about it. I would have to make 2% per day just to remain flat and 2% per day is 500% per year. I would take that result every day of the week. And the only way to actually make money was to make more than that.
All you need is a working brrain to realise that this is insane.
In a later post I will try to explain how to avoid all this. But for now, I highly recommend you to audit your trading costs too. You need to know the mathematics behind it and realise if you have any chance of success to begin with. Otherwise your better off in a casino as I was with my 2000 account and 6.95 trade cost.