Hi guys,

I want to share my idea on commissions and profit.ly, since I've seen something that kinda bugs me a little.

I see so many people on here that are trading with a small account, just like I am. I am trading with 3k, and the value of my positions is always about 1k. In order for me to have any profits at all, I need to be winning like 2% already. If not, I will actually lose money already on a trade, due to commissions.

The thing that bugs me is that a lot of you guys are posting trades on profit.ly without excluding commissions.

Here's why it bugs me:

To anyone trading with a small account, you just have to accept that commissions are a part of this game. If you do not include commissions to your trades, than you're are basically tricking everybody including yourself.

I've seen a few who trade with small accounts and are up like $1,500 over 100 trades. That looks like a very good job, but when you are not including commissions, it can be very deceiving. If you would have included commissions, you would at the very best scenario be up $500 (if you only pay $10 per trade on commissions).

While that would still be impressive for a small account, it is definitely worse than what profit.ly is telling you. You are basically not fully transparant when you do this, since profit.ly is telling everybody that you're up 1.5k, while your trading account tells you that you're up 'only' $500.

I am seeing this effect on my trading as well. I do force myself to include commissions into my trades. You can see an export of my trades in the table below. So far I've made 10 trades.

Ticker		Position		Entry price		Exit price		P/L (inc.)		Commissions		P/L (exl.)
GEVO		2000		$0.6323		$0.7429		$193.70		$27.50		$221.20
AMRN		300		$2.9700		$2.8707		-$39.78		$9.99		-$29.79
GEVO		1500		$0.6461		$0.6389		-$30.03		$19.23		-$10.80
GEVO		700		$1.2600		$1.1300		-$105.00		$14.00		-$91.00
GEVO		1000		$0.5000		$0.6400		$128.60		$11.40		$140.00
VKTX		900		$1.3632		$1.3900		$0.12		$24.00		$24.12
PRGN		1000		$1.4635		$1.4000		-$83.50		$20.00		-$63.50
UNXL		300		$2.2800		$2.2230		-$27.10		$10.00		-$17.10
SGYP		100		$3.6800		$3.6800		-$10.00		$10.00		$0.00
SGYP		100		$3.5500		$3.6700		$2.00		$10.00		$12.00
								$29.01		$156.12		$185.13

 

You can see that I'm up $29.01, including commissions. That's the same number as is shown here on profit.ly. However, you can see that the total sum of my commissions so far is already $156.12. That's right, it's a lot. I sometimes fuck up my orders and trades, which lead me to have bigger commissions. It sucks, but I'm sure it happens to some of you as well.

My point is, if you want to be fully transparant and honest to everybody including yourself, I think you should include your commissions into your profit/losses. If I would not have included commissions, my P/L so far would have been $185.13, instead of $29.01. That's a pretty big difference to me.

Tim says that he never cares for any commissions. Well, he has a big account, he should not care indeed. But we, we have a small account and for us, commissions are a a big part of our profits. Be honest to yourself and be aware of commissions before you open another trade. This might stop you from entering bad positions or overtrading. Because even though profit.ly might not show it, your trading account is growing less/slowly fading due to these commissions!

If you're also trading with a small account, hit me up on twitter so we can share experiences. I post all my watchlists and trading ideas there. 

 

(ps: if you use Robin Hood as broker or are not trading with a small account, this post is not for you ;) )