Broker advice needed.Low startup fund+extra US trading fees. How do i beat the rake?

[Dgee]

Hi guys,

I'm a new to stock trading and setting out on my path. As I'm only starting out I only want to dip my toe into the water. I'm thinking £ 700 ( approx 1000 usd ) I won't make frequent trades as the cost would eat into my small capital.

As the title suggests I'm looking for a brokerage that would give me the most bang for my initial buck.
Requirements for a broker:
I must be able to trade on the US markets as well as the UK.

There is a specific companies stock I want buy on the nasdaq. Let's give this company the name XYZ.
After some research my concerns are:

With such a small starting stake I'm worried it will make beating the rake (overcoming fees of the brokerage sites) very hard. To put it another way after all the fees there may not be much if any profit left.

For example I buy 1000 us dollars worth of XYZ.
Let's say a brokerage costs over a year:
£ 15 when making the initial trade. ( I know there are lower charges but I've tried to average this out as some sites charge higher for trading abroad)

£20 every 6 months account fees x 2 ( if the site doesn't have this charge it may charge a roughly comparable "holding forgien stock charge")

1.5% currency FX exchange rate when buying
 
1.5% currency FX exchange rate when Selling

( I'm sure there are many hidden fees I'm not spotting too)

Add all this together it would cost approximately
100 us dollars for this one trade

So for me to even to even break even on this trade XYZ would have to increase in value by 10%.

This seems a very hard rake to beat repeatedly for a small investor.
Are there any cheap brokerages which would get this 10% figure down dramatically for investing in overseas markets?

Or have I made misstep in how I'm looking at the whole situation?

Do I need to be braver and dip my toe more into water? I.e. The rake becomes less the bigger your trade....

Looking forward to reading advice as my heads spinning with questions

Thanks,
Dave

 

[Dgee]

Hi guys,

I'm a new to stock trading and setting out on my path. As I'm only starting out I only want to dip my toe into the water. I'm thinking £ 700 ( approx 1000 usd ) I won't make frequent trades as the cost would eat into my small capital.

As the title suggests I'm looking for a brokerage that would give me the most bang for my initial buck.
Requirements for a broker:
I must be able to trade on the US markets as well as the UK.

There is a specific companies stock I want buy on the nasdaq. Let's give this company the name XYZ.
After some research my concerns are:

With such a small starting stake I'm worried it will make beating the rake (overcoming fees of the brokerage sites) very hard. To put it another way after all the fees there may not be much if any profit left.

For example I buy 1000 us dollars worth of XYZ.
Let's say a brokerage costs over a year:
£ 15 when making the initial trade. ( I know there are lower charges but I've tried to average this out as some sites charge higher for trading abroad)

£20 every 6 months account fees x 2 ( if the site doesn't have this charge it may charge a roughly comparable "holding forgien stock charge")

1.5% currency FX exchange rate when buying
 
1.5% currency FX exchange rate when Selling

( I'm sure there are many hidden fees I'm not spotting too)

Add all this together it would cost approximately
100 us dollars for this one trade

So for me to even to even break even on this trade XYZ would have to increase in value by 10%.

This seems a very hard rake to beat repeatedly for a small investor.
Are there any cheap brokerages which would get this 10% figure down dramatically for investing in overseas markets?

Or have I made misstep in how I'm looking at the whole situation?

Do I need to be braver and dip my toe more into water? I.e. The rake becomes less the bigger your trade....

Looking forward to reading advice as my heads spinning with questions

Thanks,
Dave

Come on experts Help a noob out. Im not asking for trade secrets. Just the cheapest brokerage for a small fry from UK to deal in the US.#

If im a space cadet and should not even think of trading abroad with such a small stake then tell me that too Should I learn the ropes in UK market first with less fees?

Id appreciate the cander

Dave

 

[MikeD67]

I don't normally post on this site. But your topic forced me to. It screams I need help. You should not be attempting to trade with 1k USD. Mark my words your asking to fail. You'd be better off giving me 1000 and I'll give you back 500 in a year. As I would be willing to bet you will have nothing left in a year. Now that I've said that.

Spend the next year honing your skill and tradecraft. Proving to yourself you can constantly make money and save your ass off as you work at a real job. At that point you will trust yourself as you have proven you can trade and will have large chunk of cash if you saved well. Either way if you don't want to listen to me save this post and read the upper paragraph later in life.

Trading is not a get rich quick scheme. Success puts you in a group of 1%rs. Remember that.

 

[tomorton]

Hi Dgee - I'm going to bite the bullet and advise that with such a small account you're almost inevitably going to end up starting your trading through the dreaded spreadbetting. You're UK-based so its available to you, it offers low account deposit requirements, high leverage and low overheads as long as you're not holding long-term: also the opportunity to go short on other targets than your XYZ. No currency exchange factors, the transaction is onshore UK in GBP rergardless of where your target share is registered/issued.

The main downside is that it offers high leverage - this kills most people's accounts. Also, its too expensive with overnight charges for buy-and-hold long-term, 3 weeks is the max most people will bear, and the SB firm will only offer a market on the larger cap non-UK shares.

 

[tomorton]

I should have mentioned its also free of tax obligations.

 

[up-down]

for short term day trading US Stocks i use JFD mt4 £500 deposit
for long term US Stocks I use Iweb share dealing

good luck

 

[Badweather]

Also worth mentioning, is that CFDs are very common trading instruments in the UK. They're contracts with the brokers themselves, but provide exposure to many markets, including the US. With the right broker you might be able to take micro positions and learn to trade what you're interested in, without the risk of blowing out your account on taking full positions. AVA is one that comes to mind, but I'm sure there's others like them.