How about those commission fees?

Everyone always raves about them. “Wow, Robinhood has commission free trading” or “Questrade is only $4 and some cents for a trade” etc.

To an experienced trader, people raving about commissions come off as nothing more than unconsciously focused on the wrong aspect of trading. In that how horrible of a trader would you aspire to being, that $10 or $20 makes an astounding difference to your trading journey. It’s all pathetic. Instead, I say focus on a broker who has the following things going for them:

1. Ideally, they don’t execute the opposite of your trade or CFD contract. As in, if you go long, they don’t go short. Can be sometimes impossible to find.
2. They have excellent executions. If you want to work the OTC’s, you don’t have a broker who hmm’s and haa’s about filling you. They just fill you. Vice Versa, you don’t want to be stuck in a position because of horrible fillings.
3. They have a stock trading platform where you can use both click trading and equity orders. This is extremely beneficial to trades which move fast and require you to move equally as fast with it.
4. Good customer service. If you need help with something, their hold lines are not hours long. They answer the phones really quickly, and they have a good attitude and can-do willing attitude to help you. Some brokers can be horrible for this.

So, I don’t get bent out of shape over the price of the commission. If the broker has a solid reputation and meets my 4-step criterion then I likely go ahead with them. Besides, when this is all routed professionally inside of an incorporation, the commissions are a welcomed tax write off anyway. So, it doesn’t matter what they charge.

For beginners, commission can also be a point of concern in that they go all in on a trade because they don’t want to pay commissions. While I can appreciate the thought process, it’s not fundamentally sound. Let’s say if you wanted to take a 2000 share position of company ABC. In order to avoid paying more in commissions, you throw all 2000 shares at the stock at once. The stock crashes $1/share in a matter of a few ticks, and you find yourself down $2000. Wouldn’t it have been smarter to take a 500-start position and in this instance only be down $500 plus the commission? As opposed to the entire $2000. 

Yet again, we get to the conclusion that the thoughts of how much it costs to trade, needs to be an inconsequential part of trading. You take a trade with a strategy because you believe and stick to your trading thesis. Don’t invite disaster as the example above because you want to “avoid” commission fees. Commission fees are chump change. And you need to start getting adjusted to that way of thinking if you plan on succeeding in this game.