PLEASE HELP... Is it possible to be profitable with a small account after commission?

[krooto 5]

Hi all,

I am feeling quite dejected, foolish, and let down. I have spent a couple of thousand on learning to day trade, and I have only just realised that the financial bar to entry is far higher than I had anticipated. 

First, a bit of background. I have been trading in the DAS sim for 4 months now, and doing pretty well. I started with a $1000 dollar account as this is what I could afford for a live account (fortunately what I can afford has increased since then). I have been growing my demo account consistently by 1 to 2 % every day. My plan was to use Capital Markets Elite Group as my broker to escape the PDT rule. I am non-US based.

I have been logging and reviewing my trades thoroughly, as suggested by the BBT community. However, I misinterpreted the CMEG commission rates on trades... I thought that it was $2.95 per trade, which is only paid when opening the position. I thought partials and closing trades did not incur costs. I was doing well using this fee structure.

However, after watching Carlos's video on CMEG fees (https://www.youtube.com/watch?v=yoKpnFiagzE) I now know that I was way, way, way off. Every 'ticket' incurs the $2.95 fee. So entering, partials, and closing the trades also incurs the fee.

My trading style involves opening a trade, and then quickly scaling out (sometimes 5 or 6 partials), and often leaving a runner share size on. I can quite comfortably make my 1% a day doing this if it is $2.95 per trade. However, considering that I am currently only going for less than $30 per day, if I use the REAL fee structure, then entering a trade, taking 5 partials and closing out will cost $20.65 in commissions?!?!?!? 

Hopefully I am wrong and someone can call me silly for feeling dejected because this is not how it works.

Otherwise, can someone please enlighten me as to how it is possible to be profitable in a small account with CMEG? I watched a video recently where Mike B said that he aims for $50 a day BEFORE commissions. I assume after commissions he wont have much left if he is using CMEG. I know that Carlos uses CMEG, would be interested to know how he gets around the ridiculously extortionate fee structure and is able to make a living out of trading?

 

Perhaps it's impossible to scalp and take partials on a small account with CMEG? And instead a new approach is needed where you enter, let it move in your direction, and close, without taking partials; otherwise your profits will have been eaten up.

Thanks in advance!

 

[Alastair 114]

Headup my friend. U invested in yourself, a good investment. It will reap great rewards eventually.

I am sure I heard ppl in the chat room talking about a "NEW" rate structure at CMEG.....tiered.....similar/close to Interactive Brokers, not as low but close.  Ask Thor to talk about, they offered it just after he left them.

If u can get to 2500 in acct so u get more buying power that may help also.  Update the forum/thread when u get the info for others.

Keep up great work, u working through the process, this is a marathon not a sprint.

 

 

[Abiel 475]

4 hours ago, krooto said:

Every 'ticket' incurs the $2.95 fee.

Please see this forum thread for CMEG commission structure for BBT Members 

[Bryan W 50]

For members of BBT, Andrew has negotiated a reduced comms plan with CMEG where the minimum fee is reduced to 50 cents per ticket. Please see details at this link: https://bearbulltraders.com/brokers#CMEG

 

[krooto 5]

1 hour ago, Alastair said:

Headup my friend. U invested in yourself, a good investment. It will reap great rewards eventually.

I am sure I heard ppl in the chat room talking about a "NEW" rate structure at CMEG.....tiered.....similar/close to Interactive Brokers, not as low but close.  Ask Thor to talk about, they offered it just after he left them.

If u can get to 2500 in acct so u get more buying power that may help also.  Update the forum/thread when u get the info for others.

Keep up great work, u working through the process, this is a marathon not a sprint.

 

 

Thanks very much for your kind words! Ok I will see what I can find out and will keep the thread updated! Thanks again!

[krooto 5]

1 minute ago, Bryan Walquist said:

For members of BBT, Andrew has negotiated a reduced comms plan with CMEG where the minimum fee is reduced to 50 cents per ticket. Please see details at this link: https://bearbulltraders.com/brokers#CMEG

 

Thank you Bryan, this is the sort of info I was looking for. Can I ask, do you know if that reduced fee (0.004 per share, minimum $0.5 per ticket) applies for trades involving any number of shares, or does it only apply to trades with more than 'x' shares (their normal fee structure has different tiers, where if you buy a certain number of shares, you get a better fee)? 

I ask because my share size (given my small account), is often around 50 to 200 shares depending on price. Do you think that I will get the BBT discounted fee given my small size?

Thanks again for taking the time to answer my question!

 

1 hour ago, Abiel said:

Please see this forum thread for CMEG commission structure for BBT Members 

Thank you Abiel for pointing me in the right direction, much appreciated!!!

[Bryan W 50]

Just now, krooto said:

Thank you Bryan, this is the sort of info I was looking for. Can I ask, do you know if that reduced fee (0.004 per share, minimum $0.5 per ticket) applies for trades involving any number of shares, or does it only apply to trades with more than 'x' shares (their normal fee structure has different tiers, where if you buy a certain number of shares, you get a better fee)? 

I ask because my share size (given my small account), is often around 50 to 200 shares depending on price. Do you think that I will get the BBT discounted fee given my small size?

Thanks again for taking the time to answer my question!

That's where it comes down to the minimum 50 cents. If you bought one share then sold it, $1 round trip from what I understand. I don't have CMEG, so I can't show you an example of comms though.

[VladMD 21]

Hi there Krooto and best of luck whenever you decide to go live!

 

I'm pretty sure your question has been answered already, but I've been using CMEG for a while and wanted to give you an actual example to ease your mind a little. I also trade using a small account (ok, bit more than 1000 but still below the PDT threshold) and I can confirm that you won't even care about commissions. Yesterday, for example, I traded 4 different stocks and had a total of 24 tickets (which includes all entries and partials) and my total commissions, including ECN fees, were about $14. Suppose I only took one trade and partialled as much as want to, the commission wouldn't be above $4-5 at the most.

 

Hope this helps and keep up the good work because small accounts work just as well as big ones as long as your trades are good. 

[Bryan W 50]

1 hour ago, VladMD said:

Hi there Krooto and best of luck whenever you decide to go live!

 

I'm pretty sure your question has been answered already, but I've been using CMEG for a while and wanted to give you an actual example to ease your mind a little. I also trade using a small account (ok, bit more than 1000 but still below the PDT threshold) and I can confirm that you won't even care about commissions. Yesterday, for example, I traded 4 different stocks and had a total of 24 tickets (which includes all entries and partials) and my total commissions, including ECN fees, were about $14. Suppose I only took one trade and partialled as much as want to, the commission wouldn't be above $4-5 at the most.

 

Hope this helps and keep up the good work because small accounts work just as well as big ones as long as your trades are good. 

Thank you for your input on this! I'm with IB, so my only source of the confirmed lower comms is what I see in the room. I rarely see actual numbers. I have a question for you, just so I'm passing on correct information, to get that rate, are you using LIMIT in your script? Nothing else special?

Bryan W.

[VladMD 21]

2 minutes ago, Bryan Walquist said:

Thank you for your input on this! I'm with IB, so my only source of the confirmed lower comms is what I see in the room. I rarely see actual numbers. I have a question for you, just so I'm passing on correct information, to get that rate, are you using LIMIT in your script? Nothing else special?

Bryan W.

Yep that's right, just LIMIT, nothing else special.

[CliffG 31]

Just to expand on what's been said before. The discounted commission rate with CMEG is at 0.004 per share with a minimum of 50c per 'ticket'. If you trade a stock and get 125 shares - that would be the optimum no. of shares (125 x 0.004 = 50c). So, if you are taking 125 shares or less, you pay 50c for every entry, partial, exit, etc. If you are taking more than 125, then you start to pay a bit more - e.g. if you open a trade with 250shares, that's $1 right away. 

I also have a low balance (4-5K), and commission suck, especially if you find yourself a bit down and are then overtrading to make it back. I have found times where I would break even on Gross, but then face a $30 commission/ECN/sec fees. 

One tip.. Don't trade stocks where the price is very low and you have a tight stop - you may be risking $25, but you are taking 1000 shares right away (you're already $4 down on the trade). I prefer to play higher prices stocks that move by larger dollar amounts, you take a significant amount of lower shares. On the flip side, I don't trade things like $AMZN where it's 3k per share.. maybe you take 3 or 4 shares, and how are you going to partial out? 

I prefer to trade $50 - $500 normally (although I do trade $TSLA and $NVDA at time too 😉 )

Hope that helps.

[krooto 5]

14 hours ago, VladMD said:

Yep that's right, just LIMIT, nothing else special.

@VladMD thank you so much for enlightening me about the fee structure at CMEG that Andrew managed to negotiate! Honestly, it's made me feel a hell of a lot better because now making a living from day trading seems once again to be a possibility 🙂 I've got a lot of learning to do, but glad I joined this community as I've learnt as much in a few days as I would've learnt on my own!

You mentioned that you use LIMIT to get access to the reduced fees. Do you have to use LIMIT to get the fees? In other words, if I use a market order, will I then pay the more expensive $2.95 per ticket price? 

I ask this because I use the BBT Equalized Risk Per Trade Hotkey (https://www.youtube.com/watch?v=0hw59cB60os&list=PLAG9eu5KSY7gatBTCE5PYeA20olFlcvmT&index=10) which (I think....) is a market order? Here is the code (taken from the video):

StopPrice=Price-0;DefShare=BP*0.925;Price=Ask-Price+0.00;SShare=20/Price;Share=DefShare-SShare;DefShare=DefShare+SShare;SShare=Share;Sshare=DefShare-SShare;Share=0.5*SShare;TogSShare;ROUTE=SMRTL;Price= Ask+0.05;TIF=DAY+;BUY=Send;DefShare=200;TriggerOrder=RT:STOP STOPTYPE:MARKET PX:StopPrice-0.05 ACT:SELL STOPPRICE:StopPrice QTY:Pos TIF:DAY+;

Maybe it's possible to turn that hotkey code into a limit order if it's not already...? I'll have to ask the community!

 

[krooto 5]

10 minutes ago, CliffG said:

Just to expand on what's been said before. The discounted commission rate with CMEG is at 0.004 per share with a minimum of 50c per 'ticket'. If you trade a stock and get 125 shares - that would be the optimum no. of shares (125 x 0.004 = 50c). So, if you are taking 125 shares or less, you pay 50c for every entry, partial, exit, etc. If you are taking more than 125, then you start to pay a bit more - e.g. if you open a trade with 250shares, that's $1 right away. 

I also have a low balance (4-5K), and commission suck, especially if you find yourself a bit down and are then overtrading to make it back. I have found times where I would break even on Gross, but then face a $30 commission/ECN/sec fees. 

One tip.. Don't trade stocks where the price is very low and you have a tight stop - you may be risking $25, but you are taking 1000 shares right away (you're already $4 down on the trade). I prefer to play higher prices stocks that move by larger dollar amounts, you take a significant amount of lower shares. On the flip side, I don't trade things like $AMZN where it's 3k per share.. maybe you take 3 or 4 shares, and how are you going to partial out? 

I prefer to trade $50 - $500 normally (although I do trade $TSLA and $NVDA at time too 😉 )

Hope that helps.

Interesting, thanks very much for the further info @CliffG! That's very true about the price of the stock vs the number of shares and how that relates to your commission, I hadn't thought about that yet. Thanks for the heads up!

Looks like I will have to adjust my trading style slightly with these new fees... It might be a good thing for me though, I often panic and scale out quickly as soon as it moves my way, as I only aim for 1% a day. I might start hanging on a bit longer and see how that works out for me! Thanks again! 🙂 

[Alastair 114]

11 minutes ago, krooto said:

as I only aim for 1% a day

 

1% per day is AWESOME.  Remember its compounded 1% X 5 days = 5++% for week....5++% x 4 weeks = 20+++% compounded .......etc etc.

Most powerful force is compounded interest.

[VladMD 21]

8 minutes ago, krooto said:

@VladMD thank you so much for enlightening me about the fee structure at CMEG that Andrew managed to negotiate! Honestly, it's made me feel a hell of a lot better because now making a living from day trading seems once again to be a possibility 🙂 I've got a lot of learning to do, but glad I joined this community as I've learnt as much in a few days as I would've learnt on my own!

You mentioned that you use LIMIT to get access to the reduced fees. Do you have to use LIMIT to get the fees? In other words, if I use a market order, will I then pay the more expensive $2.95 per ticket price? 

I ask this because I use the BBT Equalized Risk Per Trade Hotkey (https://www.youtube.com/watch?v=0hw59cB60os&list=PLAG9eu5KSY7gatBTCE5PYeA20olFlcvmT&index=10) which (I think....) is a market order? Here is the code (taken from the video):

StopPrice=Price-0;DefShare=BP*0.925;Price=Ask-Price+0.00;SShare=20/Price;Share=DefShare-SShare;DefShare=DefShare+SShare;SShare=Share;Sshare=DefShare-SShare;Share=0.5*SShare;TogSShare;ROUTE=SMRTL;Price= Ask+0.05;TIF=DAY+;BUY=Send;DefShare=200;TriggerOrder=RT:STOP STOPTYPE:MARKET PX:StopPrice-0.05 ACT:SELL STOPPRICE:StopPrice QTY:Pos TIF:DAY+;

Maybe it's possible to turn that hotkey code into a limit order if it's not already...? I'll have to ask the community!

 

Before I started using CMEG, I did as much research as possible and it became pretty clear to me that yes, you do have to use LIMIT. However, I never actually tried anything else to see if it works because I didn't have to. While I don't use Kyle's equalized risk hotkey (which is awesome by the way, but it just doesn't fit my personality), I'm pretty confident that if you replaced the route with LIMIT, it would be pretty much the same. Obviously please verify this and test it thoroughly in sim before attempting it live. 

 

And just as a side note, when you use LIMIT and set the price as "Ask" or in this case "Ask+0.05" it essentially works like a market order and you get filled immediately. 

 

Hope this helps 🙂