Trading Costs

Trading costs comprise every dollar lost to execution fees, slippage, and spread. For active traders, these costs are a constant drain that must be managed to ensure long-term profitability.

Strategies that look profitable on paper can often fail when realistic trading costs are applied. Successful traders spend significant effort in modeling these costs, using them to refine their order sizing and entry methodology.

It is an essential component of professional risk management and business planning, ensuring that only strategies with a positive expected net outcome are pursued.