An easy way to calculate broker’s fees is to subtract your round-trip trading cost from the average trade (win & loss) figure given on the summary report. Remember that these test use $1000 lots so adjust your numbers accordingly with your typical trade size. You will note that MANY of the tests we have run so far would turn to a negative expectancy if you use any of the ~$20 round trip brokers. Please keep this in mind as you review and consider these results. Many of the 8% trailing stop tests generate more in broker's fees than net profit.
To drive this point home, I've decided to use the following example. The system tested here, with the 8% protective+20% profit target, generated 7678 trades over a 10 year period. The difference in commisions alone between TD Ameritrade (for example) and Interactive Brokers would have bought you this...
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqIZQU32LYNNk7Aet9bCdzv8iRqvY_SYZ8v8qxckWI4vzEkU2u03f-J-EAaPJy9e1aXf5mnBwa9gDc1FlJRe-_hsxrkVyxaRaDZWZthFmOPGtqLxKKuwQjDCmTMv3mQvXz1rrscahkz1NO/s400/v8vantage.jpg)
(7678*$20)-(7678*$2)=$138,204 (asuming lots under 200 shares)
1 comment:
Wow that is crazy. I've never really thought about it like that before but that is absurd. This would make a great commerical for Interactive Brokers.
Post a Comment