TAKE INTO ACCOUNT ALL COSTS/EXPENSES IN TRADING! 💸

Take into account all the expenses in trading. PLEASE LIKE and SUBSCRIBE TO HELP US DO MORE. Warren Buffett mentioned frictional expenses; these are little expenses that come into a deal but you don't think much about but they can add up to substantial amounts over time. And this also applies in trading (not just investing). For instance as a trader you might ask yourself should I do scalping, day trading, swing trading or long term trading? Scalping is not really appropriate for most people as frictional expenses can add up rapidly for very short-term trading
- Spreads - tight spreads; trade a market where bid-offer spreads are reasonably narrow. Otherwise if you're trading less liquid instruments, see if you can work limit orders in the middle rather then utilise the bid/offer.
- Overnight charges
- Short borrowing fees
- Data fees although these are much cheaper nowadays; make sure you are only paying the exchanges you need data from.
- Commissions; check with the broker if there are any discounts for frequent trading
- Taxes; spread betting is tax free, CFDs are taxable but then you can offset losses against future gains.
- Performance fees; mainly for mutual funds/investment funds and robo advisors.
- Forex exposure

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