Fees

I wanted to talk about fees associated with day trading.

I use scottrade and they have $7 trades. That is $7 both ways. $7 when you buy/short and $7 when you sell/cover.

So you can think of it as $14 per opportunity. That kinda sticks in your side a bit. Today I made $135.89. After fees, I made $121.89. Am I depressed? Not really.

The goal here is to fine tune your day trading abilities and then move on to bigger transactions. Instead of working with $10,000, it would be $25,000. The good news is that the trading fees stay the same. The higher you go, then the less percentage they are of the total profit.

However, by no means should you be focusing on this. The important thing is the repeatable events you are able to take advantage of. Every day offers new opportunities. Once you have proven to yourself that you can reasonably predict these events, then you can start increasing your transaction values.

Depending on how aggressive you are with day trading (meaning almost always each day.... not once a week or whenever you feel like it), you may qualify as being a day trader in the eyes of the IRS. This means that your transaction fees are tax deductible. Again if you are really serious about this, you should be talking with your CPA.