Topic: Commissions Eat Profit
I'm testing various strategies for a broker. They asked me to adjust EA Studio to work with their stocks and indices.
It appeared that after settings commission, spread and swaps, EA Studio has a variable success for the different assets.
I found out EA Studio works very well as expected for the forex symbols.
It also works well for some of the indices, gold and Silver.
It was very difficult to find strategies for the Stocks.
It appeared the problem is in the commissions.
The broker charges $3 for the entry and for the exit for each lot.
The Forex contract (lot size) is 100000
The Gold contract is 100
The Silver Contract is 500
All other assets and stocks are 1 unit per contract.
It makes it highly disproportional. It is especially bad for the cheapest assets.
We pay $6 for 1 EURUSD lot ( 100000 * 1.14 USD) . It means the commission is 0.0068%
However for 1 Ford stock ( price 17.3) the commission is (6 / 17.3) * 100 = 34.7 %
For 1 lot Gold (price $1827 ) the commission is 0.0033%
For 1 lot Silver (price $23) the commission is 0.0052%
For 1 DJIA ( price 35450 ) - commission - 0.017%
For 1 Google (price 2755 ) - commission - 0.2%
For 1 Bitcoin (44300) - commission - 0.014%
Asset Commission % Gold 0.0033 <-- best Silver 0.0052 Forex 0.0068 Bitcoin 0.014 DJIA 0.017 Nasdaq 0.034 Google 0.2 Ford 34.7 <-- worst
It appeared that it is most effective to trade Forex, Gold and Silver for that particular broker.
It is also impossible to trade stocks or other assets.
It is amazing how 20 seconds run of EA Studio shows if particular market conditions are suitable for trading or not.