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Are trading costs the main reason of losses in trading?

  • #81
  • Jul 13, 2019 12:32am Jul 13, 2019 12:32am
Quoting dkrock
{quote} Different brokers have different ways to charge. Most likely he is on a commission + spread pricing model, in which case you are charged at entry and again at exit. I trade with a variable spread, which means I am charged half the spread at entry and whatever half the spread is at close. It is just a neat trick to possibly make more money from traders. If the spread widens at the exit, you pay a little more than if it was fixed at the entry. He might be trading like that too. It would help if you traded live so you can determine if your...
You pay half the spread when you open the trade and the other half when you close the trade? Are you being serious? What the fuck is wrong with you morons? Oh, I get it, you guys are just trolling me, very funny.
  • #82
  • Jul 13, 2019 12:49am Jul 13, 2019 12:49am
maybe all ready said i have different accounts with brokers one broker costs so high it kills the profit on trades i all ready shut down one account and have one account left withdrew money just left enough to manage the account with them one trade will be in profit shortly and the account will be closed , since asic have changed the rules so have some brokers thinking higher costs will keep the trader , so that is how you look after your money dump the broker and look for a cost effective broker,

p.s.

broker asked why even rang me when i closed account 1 , i told him why , he blamed the liquid provider i told him he is a b book and controlled what went on just got a laugh .
people leave, but this thread will go on for ever
  • #83
  • Jul 13, 2019 9:02am Jul 13, 2019 9:02am
Ok, so in summary, and based on the way I trade, my costs are different from those of other traders. But the basic point to take away is that I dont care, nor do I ever think about, trading costs. But after reading some of the posts here, trading costs seem to be damaging to many traders, such as traders that are trading for small pip levels, but especially traders who dont have a clear notion about what the actual fuck trading is all about. If you are worried about trading costs, and believe trading costs are the cause of your losses, then you need to stop trading and start learning about the market again. Or maybe take up a hobby. It's not cost and spreads and commissions that are tripping you up. It's your feeble understanding and approach to trading. Good luck.
  • #84
  • Jul 14, 2019 1:18am Jul 14, 2019 1:18am
trading costs are the reason forex trading is a negative sum game. It is a negative drag on your equity curve. After a hundred thousand trades, that negative drag is the reason the vast majority of EA's fail.
To make money, you need an "edge" and that edge has to be greater than trading costs. That's it folk's.

I think some forex trader may have a problem understanding spreads and how order filling works is because of the platform (MT4) and general lack of transparency.
Coming from a futures trading background, trading directly from the price ladder (DoM), we'd never enter a trade at market - always use limit orders.
Then if you have the Time of Sales up you can estimate where you were in the queue.
In the 30 year T-Bond futures, each tick is 1/32 of a point.
So if Bid is @ 153-23, Ask @ 154-24. The spread is always one tick.
I typically used bracket orders, so once the order is filled a limit order and a stop order are automatically placed (like tp and sl).
I think seeing the auction process on the DoM and watching the orders get filled helps you to fully grasp what is going on.
  • #85
  • Jul 14, 2019 1:25am Jul 14, 2019 1:25am
Trading costs are off course big issue. Even more improtant is to find out the ways your cfd broker is trying to screw you. Most of them try hunt for your stop even when price never reached your stop they try screw you with spreads. Other brokers just close the door when its easy money making on some story. They quickly cut lines or put your account on zero for some time. "Server overload, we're very sorry.. etc". For most of them its not in their intrest for you to make money.
Regulation is like toilet paper in this world. They cant check what they're doing on their servers. They dont care eather..
Just a few brokers are no theeves. These are the onces that admid whats best to aviod and are honest how to handle issues. Best way to avoid all this is to trade only futures by well known brokers!
Good luck
Life is great!!
  • #86
  • Jul 15, 2019 1:40am Jul 15, 2019 1:40am
I’ve tested many strategies on futures with spread 1 tick (!) and commission costs 0,5 tick and I can confidently say that all the strategies give 0 before deducting spread and commission, best strategies give zero after deducting.
In my opinion objective backtest is 10 years and not less than 1,000 trades.

Answer on question "Are trading costs the main reason of losses in trading? " is YES!
  • #87
  • Jul 15, 2019 2:08am Jul 15, 2019 2:08am
Quoting BubaYaga
we'd never enter a trade at market - always use limit orders.
My (mt4) forex broker knows no (real) limit orders, only market-on-touch orders. Meaning, a "limit" ("pending") order becomes a market order as soon as price touches the limit.. And I think this is the case with all ndd brokers in fx.
Return To Disorder
  • #88
  • Jul 17, 2019 8:51pm Jul 17, 2019 8:51pm
Quoting GEfx
{quote} You are exactly right. Well said. If you find yourself thinking about or blaming spreads, commissions, and slippage on your losses, then you have failed at trading. Please go find something else to do and stop asking stupid questions.
Your saying the truth, i think we should stop confusing ourselves
THE TRUTH IS SIMPLE,ACCEPTING THE SIMPLICITY OF THE TRUTH IS WHAT IS HARD
  • #89
  • Jul 17, 2019 8:57pm Jul 17, 2019 8:57pm
Quoting RangeRider
The Biggest cause of Trading losses is making Bad Trades! Simple. A good trade will make you money regardless of the minor internal cost factors. Guessing at the market Guessing at News releases Bad Money management Trying to squeeze that extra few Pips Relying totally on EA's Not following your system/strategy to the letter Good trades and systems make money consistently and bad ones don't. I will attach an "old school" print tool to help out. Use this Simple Checklist/Watchlist to slow you down and to make sure you have everything lined up before...
This is the simple Truth.(The Biggest cause of Trading losses is making Bad Trades) in my years of looses this is what i found out.

THE TRUTH IS SIMPLE BUT ACCEPTING THE SIMPLICITY OF THE TRUTH IS WHAT IS HARD
THE TRUTH IS SIMPLE,ACCEPTING THE SIMPLICITY OF THE TRUTH IS WHAT IS HARD
  • #90
  • Jul 20, 2019 8:55pm Jul 20, 2019 8:55pm
Quoting martinez1
{quote} This is the simple Truth.(The Biggest cause of Trading losses is making Bad Trades) in my years of looses this is what i found out. THE TRUTH IS SIMPLE BUT ACCEPTING THE SIMPLICITY OF THE TRUTH IS WHAT IS HARD
Sure, but let's assume the OP trades ticks or 1M charts and loses all the time because the trades are not strong enough to cover the spread. That is the complaint, lol. He does not want to structure his business to fit the market. He wants the market to change to accommodate him.
You cannot be extraordinary by being normal
  • #91
  • Jul 24, 2019 9:04am Jul 24, 2019 9:04am
if a trader is worrying about trading cost, then they're probably over trading. but that's just me.
Monkey See, Monkey Do
  • #92
  • Jul 25, 2019 3:44am Jul 25, 2019 3:44am
Quoting TradeTarsier
if a trader is worrying about trading cost, then they're probably over trading. but that's just me.
It depends on strategy type of course, but why you should pay more anyway?
  • #93
  • Aug 1, 2019 3:26am Aug 1, 2019 3:26am
Quoting noterdam
What do you mean? It shouldn’t have been that pricey if you trade on a promising platform
I don’t think so, which one you use?
  • #94
  • Aug 1, 2019 3:56am Aug 1, 2019 3:56am
Quoting noterdam
What do you mean? It shouldn’t have been that pricey if you trade on a promising platform
It really all depends on the system you'r trading, different brokers don't make too much difference, unless if they'r a bucket shop broker.
  • #95
  • Aug 1, 2019 4:54am Aug 1, 2019 4:54am
I only trade 4H and above since that way the spread is max 2% of expected profit or 5% of stoploss. I don’t want to make the broker rich.

I never understood how people can trade for like 5 tick or 10 tick profit, or even 1 tick profit(LOL). You’re giving away 10%-50% of your profit away in spread, not even counting the losses. I would only trade lower TF if I was 100% sure of making money on every trade. Only then would the spread be an acceptable cost of business
  • #96
  • Aug 1, 2019 10:53am Aug 1, 2019 10:53am
Here is good example for those who "trade on H4"
Inserted Video
  • #97
  • Aug 1, 2019 5:06pm Aug 1, 2019 5:06pm
Quoting komposter
Here is good example for those who "trade on H4" https://youtu.be/pn0a5gyy7ME
Let's make this simple, using the example from attached video. You open an account and deposit $10,000. Your strategy delivers a 40% return in the first year. In my universe, the 40% return is net transaction costs, so at the end of the year, the account has $14,000. In the video, the 40% return is a gross figure, as if the trader's view of PA during a trading session is isolated from the reality of what's happening in their trading station. The point is, you as a trader must develop a strategy that accounts for the broker's cut on each and every transaction. I had 3 trades in the $Y today, and made 85+45+35=165 pips, net the spreads, or 175 pips gross. When I made the trades, the spread never entered my mind. It should not enter yours, either.
  • #98
  • Aug 1, 2019 6:02pm Aug 1, 2019 6:02pm
Quoting GEfx
{quote} Let's make this simple, using the example from attached video. You open an account and deposit $10,000. Your strategy delivers a 40% return in the first year. In my universe, the 40% return is net transaction costs, so at the end of the year, the account has $14,000. In the video, the 40% return is a gross figure, as if the trader's view of PA during a trading session is isolated from the reality of what's happening in their trading station. The point is, you as a trader must develop a strategy that accounts for the broker's cut on each...
If your strategy delivers 40% net return including high costs (3 pips spread in example), it will deliver 140% net return with low ones (0.2 spread + 0.5 commission in example). So, it has sense.
  • #99
  • Aug 1, 2019 6:32pm Aug 1, 2019 6:32pm
Quoting komposter
{quote} If your strategy delivers 40% net return including high costs (3 pips spread in example), it will deliver 140% net return with low ones (0.2 spread + 0.5 commission in example). So, it has sense.
Let me be bold and blunt about this comment: if reducing your spread/commission from 3 to .7, would increase your return from 40% to 140%, you are not a serious trader. There is no fucking way, that reducing your cost by 2.3 pips per trade, will increase trading profits on a $10,000 account, from $4,000 to $14,000 (net). This is just retarded to continue this discussion.
  • #100
  • Aug 1, 2019 9:40pm Aug 1, 2019 9:40pm
Quoting GEfx
{quote} Let me be bold and blunt about this comment: if reducing your spread/commission from 3 to .7, would increase your return from 40% to 140%, you are not a serious trader. There is no fucking way, that reducing your cost by 2.3 pips per trade, will increase trading profits on a $10,000 account, from $4,000 to $14,000 (net). This is just retarded to continue this discussion.
It depends only on your expectancy.
40% will turn into 140% if your average profit is 4.5 pips:
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Click to Enlarge Name: 2019-08-02_05h32_44.gif Size: 990 KB


And what is yours (serious trader has monitoring, of course)?
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