12-15-2004, 08:42 PM
Hi,
Your assumption is that you will make money with most of the transactions. In a bull market, that is a pretty safe assumption. In a flat or bear market, that is not a good assumption. Unless you have a way of analyzing the stocks, you will make a profit on about half (in a level market) and take an equivalent loss on about half. So, you would break even if it weren't for the fee. With the fee, you would have a steady net loss -- and any net loss, no matter how small, if continued long enough will break you.
Furthermore, you have to *work* at trading. How much is your time worth? How much, per hour, do you need to make to get that hourly rate? How much do you have to risk to get that at your 1%? And how much will you lose if the market goes down -- because even if you wait it out, you are losing money every day that you are not getting some return on your investment if you focus on short term transactions.
However, it is your money. By all means speculate. If you make money, good for you. If you lose, then good for me, for the money you pump into the market will most like help to drive up my long term investments ;)
--Pete
Abramelin,Dec 15 2004, 01:25 PM Wrote:If one can make money with a variation of 1 % of a purchase/sale,there is 0.925 % left to make a profit.[right][snapback]62911[/snapback][/right]
Your assumption is that you will make money with most of the transactions. In a bull market, that is a pretty safe assumption. In a flat or bear market, that is not a good assumption. Unless you have a way of analyzing the stocks, you will make a profit on about half (in a level market) and take an equivalent loss on about half. So, you would break even if it weren't for the fee. With the fee, you would have a steady net loss -- and any net loss, no matter how small, if continued long enough will break you.
Furthermore, you have to *work* at trading. How much is your time worth? How much, per hour, do you need to make to get that hourly rate? How much do you have to risk to get that at your 1%? And how much will you lose if the market goes down -- because even if you wait it out, you are losing money every day that you are not getting some return on your investment if you focus on short term transactions.
However, it is your money. By all means speculate. If you make money, good for you. If you lose, then good for me, for the money you pump into the market will most like help to drive up my long term investments ;)
--Pete
How big was the aquarium in Noah's ark?