Here is my 2 pence worth .
Been trading on and of since I was 18.
1998 Started this full time, it was like a roller coaster, most of my trades were with options (cfds).
By 2000 life was bad as losses were far more than planned.
I did a usefull exersise on how to inproove my trading .
The done a cost exersise if i could save money by trading Direct Into The Market instead of Spread Betting.
The results based on £10 per piont trading the Dow.
SB Spread =4 pionts times 20 trades per week equalls 80 pionts has to be in my favor to break even.
DMA =1 piont times 20 trades per week equalls 20 pionts had to be in my favor to break even.
Based on me swiching to Direct Access with £1000 margin per £10 per piont contract I could save 80 minus 20 = 60 points per week on costs £600 minus commission/exchange fees at £2 per trade this was £100 in broker costs minus the £600 = I instantly become £500 per week better of if I changed to Direct Market Acess.
In the year 2001 my trading was hasstle free , with the £500 per week I saved through not Spread Betting my account was going to be instantly £25,000 better of by the end of the year.
Exit and Entry become inprooved, and due to the instant fills my account in year 2001 started with £10,000 and finished with £68,000 this amount was after £2000 per month was taken out as income.
2002 ended with £55,000 but still managed to take £2k income
2003 Was a brilliant year figures not disclosed
2004 I traded 2-3 times a week 40 week per year with most been longer term postions for one week to a month, Shorter term postions intra day were still been taken.
2005 I have a machanical system in place that worked fine in the October things turned sour, I couild not do any thing wright ,m what had worked for me no longer worked resulting in a loss for 2005.
2006 I did not trade untill September , took time out , holidays , time with loved ones. September I was back and made one good trade and did not trade again untill 2007.
2007 Life was calm and the time taken when not trading I relised I were over doing trading. New plan. After considering when the market was going to move I then set out times when its best to trade short term, also when markets were at cirtain levels I was required to trade ( start work )
over 2007 life was good and i know when i was to trade and not to trade which after this knowing when not to trade was a critiacal turning point.
2008 Started shorting the market, then like a fool I tried to catch the lows on several attempts which resulted in heavey losses. these losses had been limmited as I used shorter term trades to off set the losses. when Dow hit 8050 I went long and held and sold near the high on both occasions.
Having a stratogy to buy and hold for ever as this low will never be breached again is high risk in this current market.
So for me I have saved £500 per week or £25,000 per year over 8 years = £200,000 by doing business through Direct Market Acsess not including intrest.
I still Spread Bet 10 % of the time when i can uses the rules to gain large amounts of £££ in a small time frame (seconds not minunits)
So there is my answer decide for your self .
Do the equations and decide if you could increase earnings if trading costs were lowered .
Good Luck ,
TOMTOM.
Remember if you get it wrong you will still loose, however with DMA your losses will be much lesss based on the same trade with any Spread Betting Company
