Dear members,
Here is a question along with some thoughts on brokerage:
I have been trying to find out and I feel that zerodha is the cheapest brokerage available (flat 20 per trade). I have a sharekhan a/c but since I am still in the learning phase, I do not trade a lot and thus they charge me a brokerage is 0.5% delivery (I don't do intraday). I never trade for less that 10k per scrip. Also a 0.5% model means that I need to have a 1.4% gain to break-even (taxes included both sides).
Also, I was doing some backtesting on amibroker and here is something I realized: I took up SBI and HCL and backtested them from 2002 till date for 3 parameters:
Case 1. YoY profit without brokerag
Case 2. YoY profit with 1.4% brokerage (buy+sell)
Case 3. YoY profit with 20 bucks flat brokerage
Results are: (HCL/SBI)
Case 1: 18.31%/ 20.18%
Case 2: 13.30%/ 15.44%
Case 3: 17.95%/ 20.07%
Clearly, the 0.5% brokerage model is a BIG dent. I have noticed that for any time period, it pushes your profit potential back by 5% on an average for any stock you pick up (as in if I was to earn a 5% profit by the 20 bucks flat brokerage, I would end up with 0% profit if i were giving a 0.5% brokerage).
So I have two things running in my head:
1. Move to zerodha (or something cheaper if somebody can suggest that)
2. Continue with the sharekhan because I like their trade tiger terminal but not trade with them.
Request the experienced folks to provide some insight (or correct me if i am wrong somewhere). :thumb:
Here is a question along with some thoughts on brokerage:
I have been trying to find out and I feel that zerodha is the cheapest brokerage available (flat 20 per trade). I have a sharekhan a/c but since I am still in the learning phase, I do not trade a lot and thus they charge me a brokerage is 0.5% delivery (I don't do intraday). I never trade for less that 10k per scrip. Also a 0.5% model means that I need to have a 1.4% gain to break-even (taxes included both sides).
Also, I was doing some backtesting on amibroker and here is something I realized: I took up SBI and HCL and backtested them from 2002 till date for 3 parameters:
Case 1. YoY profit without brokerag
Case 2. YoY profit with 1.4% brokerage (buy+sell)
Case 3. YoY profit with 20 bucks flat brokerage
Results are: (HCL/SBI)
Case 1: 18.31%/ 20.18%
Case 2: 13.30%/ 15.44%
Case 3: 17.95%/ 20.07%
Clearly, the 0.5% brokerage model is a BIG dent. I have noticed that for any time period, it pushes your profit potential back by 5% on an average for any stock you pick up (as in if I was to earn a 5% profit by the 20 bucks flat brokerage, I would end up with 0% profit if i were giving a 0.5% brokerage).
So I have two things running in my head:
1. Move to zerodha (or something cheaper if somebody can suggest that)
2. Continue with the sharekhan because I like their trade tiger terminal but not trade with them.
Request the experienced folks to provide some insight (or correct me if i am wrong somewhere). :thumb: