Risk and Stock Trading Fees: The Two Barriers To Overcome If You Want A Successful Trading Career.

Home
>
Currency Trading
>
Risk and Stock Trading Fees: The Two Barriers To Overcome If You Want A Successful Trading Career.

Risk and Stock Trading Fees: The Two Barriers To Overcome If You Want A Successful Trading Career.

You know the old joke:

"How do you make a million in the stock market? Start with two million?"

There is no way around it, risk and stock market fees are a part of trading that you can`t avoid. But, you can manage your risk. You can also manage the brokerage stock trading fees that eat away at your trading float. All it takes is some planning and making good choices.

If you think you`re ready to start trading, look carefully at where you`re getting your money from. Maybe you`ve been considering trading for a while and built up some savings. That`s good planning. Or maybe you`re considering borrowing money. This is generally a bad idea. Maxing out your credit cards is a quick and easy way to get cash, but the effects can be devastating.

It`s hard enough to worry about making trading profits along with the stock market fees you have to pay. But, worrying about the debt servicing on your credit cards builds too much stress. You will be too concerned with making payments to be concerned about good trading. Don Miller talks about this in Trading Markets World Meet the Traders when he tells new traders to worry about trading well, not making money. One of the best ways to learn trading is to begin on a part-time basis. This allows you to hone your skills while you still have an income stream. As a trader, you need to realize the risk you`re taking by simply putting your money into the market.

With good money management, you`ll be able to limit your risk. But, there is a kind of risk that can`t be minimized, and that`s "market risk". This is the risk that the market might not be there tomorrow. Just by putting money in the market you are putting it at risk, so make sure you only trade with money you are willing to lose. This isn`t to say that you are going to lose all your capital - it`s just to say that you need to be able to focus on trading well, not trading to make money. See, you can only do this if you work with money you can afford to lose.

Once you`ve got your capital together, you can consider the next barrier to trading, stock trading fees. Although there is no perfect amount of capital to start trading with it`s no secret that the bigger the trading float you begin with, the easier it is to trade and the less percentage of stock trading fees you will have to pay. This is because of the single biggest expense in trading - brokerage stock trading fees.

Every broker has many different stock trading fees, but many charge flat stock trading fees per trade. These flat stock trading fees are easier on traders with larger fund sizes. For example, to obtain a better understanding on how stock trading fees work, let`s consider two traders. One is starting with an opening position of $1,000 and the second is starting with an opening position of $10,000. All traders are charged flat stock market fees of $100. So, our first trader, with a position of $1,000 has to make back ten percent of his float on each trade before he breaks even. But, our second trader only has to realize a one percent gain to reach his break-even point. This doesn`t mean that you can`t start trading with a smaller float, but if you do you are at a bit of a disadvantage.

However, you can use your trading float size to help determine your trading system. If you have a very small trading float, it`s recommended that you look at a long-term system. With a long-term system, you will be incurring far fewer stock trading fees. A short-term system, where you are receiving lots of buy and sell signals will chew up your trading float very quickly with the cost of the different stock trading fees.

This is why short-term systems, such as day-trading, are best suited to larger trading sizes - it is easier on the stock trading fees. I actually recommend that when you begin trading that you look at a longer-term system. You can manage a long-term system while still working full-time. Once you are successful with the long-term time frame, you might look at moving to a shorter-term system and focussing more time on your trading.

You can mange both risk and stock trading fees with planning, and by making good choices. Your level of capital will be set by what you can afford, and what you are comfortable risking. How that capital grows will be set by the time-frame of the systems your planning to trade, and the instruments you trade with. from winter's barrenness, they desert us too quickly!

-=-=-==-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-
David Jenyns is recognized as the leading expert when it
comes to designing profitable stock trading systems.

Discover the "secret formula" of trading that anyone can use
to consistently generate BIG profits from the market by
downloading your FREE copy of David's new Ultimate
Stock Trading Systems course.

Click Here To Download ==> Stock Trading Systems
http://www.ultimate-trading-systems.com/s tocks.html
-=-=-==-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-

In The News:

Yahoo! News: Top Stories

Atty. Gen. Mukasey collapses during speech (AP)

AP - Attorney General Michael Mukasey was hospitalized but conscious and alert early Friday after collapsing during a late-night speech to a conservative legal group.

Obama plans to nominate Clinton for top diplomat (AP)

AP - President-elect Barack Obama plans to nominate Hillary Rodham Clinton as secretary of state after Thanksgiving, a new milestone for the former first lady and a convergence of two political forces who fought hard for the presidency.

Congress sends jobless benefit extension to Bush (AP)

AP - With no end in sight to economic bad news, President George W. Bush is about to ensure that millions of laid-off workers won't see their unemployment checks disappear as the year-end holidays approach.

Asia, Europe stocks rebound after Wall Street rout (AP)

AP - Most Asian and European markets rebounded Friday after sharp declines in recent days as investors scooped up battered financial and technology shares.

Neb. lawmakers form task force on child drop-offs (AP)

AP - Lawmakers are poised to close a loophole that led to troubled teens being abandoned at Nebraska hospitals, but they aren't stopping there. Instead, they're vowing to make sure families can get help in a crisis.

Report says CIA withheld info from White House (AP)

AP - The CIA withheld information from the White House, Justice Department and Congress about the 2001 shooting down of a plane over Peru carrying an American missionary family, part of a yearslong cover-up of lethal violations in U.S. drug-interdiction procedures, according to a classified internal CIA report.

Americans still giving, despite economic meltdown (AP)

AP - As more Americans turn to charity amid worsening economic gloom, operators of food banks and other aid groups are relying on the surprisingly resilient generosity of their neighbors and finding that even when times are tough, people still give.

Man says cell phone saved him from stray bullet (AP)

AP - R.J. Richard says he doesn't normally put his cell phone in his chest pocket. But he says it saved his life the one time he did.

Former Sen. Fred Thompson plans return to acting (AP)

AP - Former U.S. Sen. Fred Thompson is going back to the small screen after his foray into Republican presidential politics over the last year.

Steelers defense controls Bengals in 27-10 win (AP)

AP - Ben Roethlisberger and the Pittsburgh Steelers know exactly how to beat the Cincinnati Bengals with or without Chad Ocho Cinco.

Central bankers wary of deflation (Reuters)

Reuters - Euro zone demand is plunging and price pressures vanishing, business surveys showed on Friday, while central bankers weighed the prospect of deflation.

Obama on track to name Clinton as top diplomat (Reuters)

Reuters - Retired Marine Gen. James Jones emerged as a leading contender for White House national security adviser as President-elect Barack Obama worked on Thursday to assemble his foreign policy team.

Bush takes financial reform agenda to APEC forum (Reuters)

Reuters - George W. Bush makes his last scheduled trip abroad as U.S. president on Friday, heading to an Asia-Pacific summit where he will seek support for global financial reform and hold talks on ending North Korea's nuclear program.

Baghdad locked down for U.S. troop pact protest (Reuters)

Reuters - Iraqi forces shut streets in Baghdad and placed snipers on rooftops on Friday before a protest by followers of cleric Moqtada al-Sadr against a pact allowing U.S. troops to remain for three more years.

Citigroup eyes options, including merger (Reuters)

Reuters - Citigroup Inc lost more than one-quarter of its market value on growing worries over whether it has enough capital to withstand billions of dollars of potential losses and despite new support from its largest individual investor.

Verizon staff had unauthorized access to Obama's cell (Reuters)

Reuters - Verizon Wireless said on Thursday that some employees had gained unauthorized access and viewed a personal cell phone account held by President-elect Barack Obama that is now inactive.

Attorney General Mukasey vital signs strong after collapse (Reuters)

Reuters - U.S. Attorney General Michael Mukasey was "conscious, conversant and alert" at a local Washington hospital after collapsing while delivering a national security speech at a hotel, the U.S. Justice Department said late on Thursday.

U.S. Navy says no word on Somali pirate ransom demand (Reuters)

Reuters - The U.S. Navy and operators of a Saudi oil supertanker hijacked by Somali pirates could not confirm on Friday reports that the hijackers had demanded a $25 million ransom.

UN raises DR Congo troop numbers to 20,000 (AFP)

AFP - The UN Security Council approved an extra 3,000 peacekeeping troops to help end conflict in eastern Democratic Republic of Congo, where fresh fighting erupted earlier in the day.

Military 'only solution' to piracy, says tanker firm (AFP)

AFP - A more aggressive military approach is the only answer to an escalation of piracy off Somalia, the world's biggest oil tanker company said Friday.

Risk and Stock Trading Fees: The Two Barriers To Overcome If You Want A Successful Trading Career.

Currency Trading Currency Trading