Now that we’ve gone through all the major categories of all the expenses I spend to
day trade each month.
We have a grand total of…
Day trading is a business, not a hobby.
And just like any business, it takes a lot of capital investment, and operating expenses,
in order to make more profits
I see many beginner day traders online trying to avoid commissions or paying for premium
subscriptions.
But if you’re running a business and trying to scale up, you can’t be cheaping out and
trying to cut corners
This is especially true in Day Trading.
Once you’ve figured out a few trading set ups and strategies that work well.
It’s time to invest more money into this business to make more profits.
In this video I want to break down exactly how much money I spend for day trading in
all of these different categories, such as trading platforms, tools, commissions, locate
fees, and many many more
I use many of these tools to scan for stocks to trade, analyze stock structure, research
fundamentals, and execute these ideas the fastest way possible
and of course, they also help me to smash the like button, because that is the surest
way to double your trading account every single day
So, let’s start with the first category, market data & trading platform fees.
I get this question a lot on all of my YouTube videos.
Which day trading platform do you use, and which one is the fastest and best for day
trading
My answer to that… hands down DAS Trader pro.
A very common misconception many new traders have is thinking DAS trader pro is a broker.
And it’s not.
Das Trader is a direct access market data provider that allows traders to execute orders
on various platforms
And the reason many professional traders choose to execute their trades on DAS platform instead
of the default from their brokers is of course the low latency order fills and reliability
of their platform
That's why I use DAS trader pro and have it connected with various brokers and pay for
multiple subscriptions per month.
Personally, I use three separate DAS Trader pro Elite subscriptions, one of each connection
to my three brokers, Interactive brokers, cobra trading, and centerpoint securities.
However, if you trade enough order volume, some brokers will waive the platform fee,
so essentially get a free $175 credit each month, and some broker will even give you
additional discounts on commissions and locate fees.
I’ll talk more about this later in the video so stay tuned
That’s why my platform fees at Cobra trading is actually $0 dollars.
I also have a Replay add-on for additional $15 per month.
The total cost for my day trading data & platform fees comes out to $365 per month.
And we are just warming up and getting started with the day trading spendings here.
Next up let’s look at our day trading research platforms, such as scanners, newswire, and
SEC Filings research
The top stock scanner I've been using for many years now and it is trade ideas
This is the technical scanner I use every single morning premarket to scan for gappers,
whether it’s small caps large caps, or even the overnight gap downs
I also use the stock detail analysis tool on Trade Ideas to really quickly analyze the
stock’s float, market cap, and short interest.
This is an extremely useful tool for me to do some really quick analysis on the fly when
the scanner picks up a low float runner
So, it’s definitely a very essential tool to my trade planning every single morning.
I have a video tutorial on how I set up this scanner on my YouTube channel if you want
to check that out.
I use trade ideas standard subscription.
The monthly cost would be $118 a month.
But I pay for an annual subscription since I used everyday, for $1068 and got it with
a 15% off discount so the cost is $908 per year, that would be $76 per month
The next research tool is for news.
I personally use Benzinga pro.
Benzinga pro is essentially a newswire service, but it also has some technical scanner components
to it in the movers feature
But I go to Benzinga to do my fundamental and news research.
I want to know why the stock is up in the first place, is it because they had FDA approval,
was it phase 1 or phase 2 trial, or was it because of earnings and guidance
And if it is earnings, what are the numbers like for earnings per sure, revenue growth
etc.
All of these are important headlines that we as traders need to know before we buy or
sell a stock
Another extremely useful feature on Benzinga is the squawk box.
In which you can listen live to Benzinga Charlie, aka my husband.
Yes, that’s right.
Benzinga Charlie is my one true love the source of my happiness, which I pay for $950 a year
See, money can buy you happiness.
Okay sorry I got a bit carried away.
The Squawk box feature is useful because you can hear Benzinga Charlie say out loud the
real-time news alerts.
Sometimes on squawk when Benzinga Charlie goes on break, you’ll hear this other guy
say other things… then I just tune out.
I dont know his name, let’s call him bagholder mike.
I think I like charlie more though, but I might be biased.
The regular cost for Benzinga Pro is $177 per month, however just like trade ideas I’ve
been on the annual plan for years.
The annual cost is now $1400.
However, I’m on the grandfathered plan of around $900 per year before they raised their
prices.
And that’s also after a 25% discount with a code I used when I first purchased many
years ago.
Therefore, I spend about $75 per month on Benzinga pro.
By the way, if you are interested in trying any of the tools that I talk about in this
video, such as Das trader pro, trade ideas, and Benzinga pro, I’ll put links to some
free trials and 15 to 25% off discounts codes in the description below.
Again, I would only recommend tools I personally use and like for day trading.
And I’ve personally been using and paying for all of these tools for many many years
now.
The next news platform I use is Briefing.
This is also a premium service for news and fundamental research for trading.
I mostly only use briefing for reading large-cap stock earnings reports and the details of
the conference calls.
Whether the company made any comments on guidance and future outlooks or any major fundamental
changes that would move the price of the stock short term for day trading.
There’s only monthly plan for Briefing.
So, I pay the monthly plan of $89 per month.
The last of the research tools I use is called FlashSEC.
I’ve tried out many premium websites for SEC filings research over the years, and this
one is definitely my favorite.
I pay a monthly subscription for $44 a month.
Alright let’s move on to perhaps the most exciting day trading expense category, broker
fees, such as trading commissions and short locate fees.
Now I’m sure many of you viewers must be wondering.
Omg humbled trader, why are you still paying for broker commission?
You can trade for free at so many $0 commission broker apps now on your iphone.
Sigh.
I think for beginner traders starting out, it’s totally fine to play around trading
on these free commission brokers like Robinhood, Webull and many others.
But if you one day want to start taking trading seriously as a full-time career…
using premium trading brokers on the desktop that require you to pay commissions is 100%
worth it.
My stance is, I don’t want to save pennies on commissions, and lose dollars in profits.
Plus, all of these fees including the subscription tools I mentioned earlier, are tax write-offs
for day trading income.
Since they are all business expenses
I trade with three different brokers.
On interactive brokers and CenterPoint, it’s very simple for me to find the total cost
of commissions and other fees each month.
However, it’s nearly impossible to do so on Cobra Trading.
If you guys recall a video I did revealing my broker statements, I literally had to scroll
down the PDF statement line by line.
There is no automatic calculation of pnl, commission costs and locate costs, per month
nor per year.
And no data export either.
Since I’m making this video during the holiday season, instead of spending the next three
hours adding all the numbers through hundreds of pages of toilet paper line by line, I would
really much rather go get drunk from mulled wine, spiked eggnog, and bury my face in chocolates,
and good food.
So, my solution to that is, I’m simply going to find the broker fees from the highest trading
volume month and the lowest volume trading month and find the average number there in
the middle.
So, the numbers are not going to be 100% accurate, but I’m doing my best here
This video is for your information only.
All the figures are of course dependent on your trading volume, whether can get rebates
from routes or whether you are long or short biased, and of course depend on which brokers
you are using to day trade.
With that said, on average, a rough estimate like I said earlier, I spend around $3500
on commissions, and $2500 on short locate fees.
To be honest, this is not bad at all, especially when it comes to the short locate fees.
This year I’m very conscious of which stocks I locate short.
And after switching my primary shorting broker from CenterPoint to Cobra trading, I’m saving
more than 25% on short locate fees.
They also provide many of the stocks to short free of charge, and lots of commission discounts
after you trade a certain volume per month.
If you have capital of more than $30K, I would highly recommend using Cobra trading.
Now that we’ve gone through all the major categories of all the expenses I spend each
month in order to day trade.
We have a grand total of $6649 of costs per month, which would be $79,788 US dollars a
year.
Remember traders, day trading is a business, and if you want to take this business seriously,
you need to spend money investing in the business and to scale-up.
Rather than spending $10 to make $100, I would much rather spend more $100 to make $1000.
And it’s the same concept in day trading.
That being said, all that 79k of expenses can be used as tax deductions against my day
trading profits.
So, if I made $400K of profit this year, I can deduct those expenses against my income.
So only $321K of that income is taxable.
With this example, not taking into account the currency exchange, in British Columbia,
Canada, where I live.
I could be saving over 2.75% average tax rate, or $42K.
I’m not a CPA, but I would be happy to go over some best practices to save on taxes
legally as a day trader in a future video.
So, if you are interested in learning more about day trading income taxes for the US
or Canada, let me know down below in the comment section, and make sure to subscribe to see
more.
Thank you guys for watching as always, I will se you next time.