Ask Colin

In your seminar, I liked the idea of splitting the entry points into a trade as it feels less risky than putting the whole 6% of capital on the first trade which has been my approach up till now. I was wondering if the increased cost of brokerage makes it too costly, although I guess by the time the 2nd and 3rd trade have been made the upward trend of the share will have been confirmed which probably off-sets the extra brokerage?

It all depends on the size of your trading capital. If it is big enough, the brokerage is not very important. However, with small capital, you just have to do the trade in one go. If you have only $50,000, then brokerage of say $30 is 1% of $3000 (6%). I would do it all in one lot. With bigger capital, you can start to stage your entry.

You are right that it is all about risk management. The brokerage on splitting your entry enables you to commit in steps as the trade goes right for you. So, the brokerage is like insurance.

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