I have just realized how costs kill you as a trader. The only answer is to find shares that look good on a slightly longer term basis. Getting in and out quickly is a mug's game. Thank you Wellington VO for that insight.(Yes, I know, not the best, but things haven't been going so well lately).
Russ,it is good that you are aware of these costs. A few months ago , i did an analysis of my equity trades in term of profit and loss and brokerage cost. Result was shocking. I had a profit of R44 000 (+/-) but my equity cost was 50% of my profit. My hard work buying ungeared shares was basically making the brokers rich. Since then, i have changed strategy.
I have also being struggling to make a decent profit using cfd's. In all fairness, macro economic factors, is making it extremely difficult to make money. My position sizing is like 1/20th of what it use to be.
Nope! You pay a "commission" which is presented as a spread - both ways. My brokerage is about the same as my "spread." You save on the various taxes which would be half a pip. The interest quickly absorbs this at 9,5%. You cannot get out when you want as the bank takes forever to process a transaction - especially when the market is chaotic and you NEED to get out. Sometimes you cancel a transaction and reprocess only to find that it DID indeed get processed and you are now double processed... half an hour later! CFD's are NOT cheap to trade - it's an illusion! They offer leverage - and that is all they offer. They lack "accuracy" - due to SBK's lethargic processing platform you cannot determine a price with adequate precision at a given point in time - also known as slippage! Interest is charged daily - the effective annual interest rate is very high!
costs are the reason i stuck with alsi. manipulate leverage by keeping more capital and trade smaller position size but more consistently 30 bucks odd cost and a few hundred points gives better numbers for me. alsi you're exposed to top 40 shares anyway. plus its liquid and regulated. and if alsi isnt your thing or getting bored, ftse100 jpn225 djia they all work in similar ways. and if more adventurous dabble in forex spot. again position size small but technique consistant returns and costs are far better. plus platform and live charts are free unkike ost and many local cfd guys
I wonder what would happen if Standard Bank removed the minimum brokerage fee and charge a percentage only of .75%. Probably total pandemonium reaching all the way to the higher echelons at the JSE, who want the current system to continue. I am aware of the issue of live pricing, but I am sure that the costs can be recovered by reviewing the current pricing structure that is outdated.