Brandon,
What you say is very true. The key is "ordinary costs." If one pays $15 or 20 per trade, IMO they will have a tremendously difficult time making a living. I pay per share (all together about 2.2 cents commish and fees). IMO scalpers have to be able to sell 100 or 200 shares all the time. That's just the way the market is set up. Even if you carry a position of 1000 shares you might find that, when cutting your loss, you have to sell 200 at 38, 100 at 37 7/8, 300 at 13/16 etc going to different participants. Paying per trade would be a heavy burden to overcome.
I can tell you that if I had to pay $20 per trade I would not be a scalper, period, because I would not be making any money. For example on Wednesday I made 108 trades. It was a bad day for me, my worst this month. I read the market badly, overtraded, executed 10 odd lots. Most of the trades were simple lots of 100 shares. Had I paid $20 per trade my commissions would have been over $2000 and I would have lost about $1500. As it was, I made a profit of $237.
I hope this example illustrates the importance of paying per share instead of paying per trade. |
