caladhanbrood
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I'm a relatively new trader and started trading October 2013. I had good beginners luck where I made 10% in one month and 10% in the next to end with a portfolio up approx 21% in just two months. Both of these stocks were uk stocks.*
However the investment strategy I use is the CANSLIM model founded by William J O'neill and as a result it was difficult to use the system for uk stocks and the easiest method seemed to be to subscribe to their daily newsletter and use their website and newsletter to screen for stocks which meet the CANSLIM criteria.*
Enter all the problems
(Here I started to diversify my portfolio to reduce the level of risk)
Around the beginning-mid December, I invested in 2 stocks. I bought YNDX at $43.22, a little higher than the proper $41.90 entry, and ALXN at $128.73 from a buy point of just below $127. Upon buying both of these stocks I was met with a nasty surprise. I noticed that the exchange rate I was being quoted didn't reflect what I found online and it is here that I learned of the hidden FX charges. In this case I was with Hargreaves Lansdown who charge a ridiculous 1.7% FX commission. They also insist on settling everything in GBP. It meant when I bought a stock I was already 1.7% down. If I wanted to sell the stock straight away I'd lose another 1.7%.
Commission is a flat fee but due to diversifying my portfolio and using smaller chunks of money it ended up being 0.5% and 1% (the money wasn't split equally) of my investment in the stocks. In others words I was already down 4.4%-5.4% as soon as I'd bought the stocks. Given I have a sell strategy where I sell if the stock falls 5-8% from my buy price (of which I stick to the lower end) it leaves me with very little wiggle room. Fast forward the market got hit hard and I ended up losing just under 10% on YNDX. With ALXN, the stock fell from 10% profit to 8.5% at which point I sold, but since I lost 1.7% due to FX charges when buying, and another 1.7% when selling, plus the fact that the exchange rate fell 1.4%, that killed over half my gains leaving me with just approx 3.8% profit.*
Once I discovered the hidden FX fees I moved over to another broker, Stocktrade, who allowed multiple currencies to be held in the same account. Hence I could convert the money into dollars and lose 1% in FX commission. But that was fine as that money was going to be used for investing for the long term, investing in multiple stocks. I then bought QIHU at $93. But I ended up paying an overseas settlement charge of £50 which was 0.7% of my investment. Commission is charged at 0.5% so in this case I was down almost 2.5% as soon as I started. I ended up losing another 8-10%. Ironically I ended up losing more money as the 2.5% automatic loss (and the higher 4.4-5.4% with HL) forced me to close my positions earlier than I'd like. As a result, I made an 8-10% loss on QIHU after which the stock ended up rising the next day to reach my buy point and surpass it.*(It went on to rise almost 10% in profit a day/two ago).
The point of this post is I'm sick of getting screwed over by fees. All of these stocks I should have made a profit on, or lost very little on. I have no problem with a stock rising 5%, coming down to 1% and selling to make 1% profit. That's fine with me. If I did that a few times then I can take a bigger risk and let a stock have a natural dip down from my buy point and wait for it to come back up and surpass my buy price (as was the case with QIHU, of course my max loss of 8% on a stock still would apply).*
So I'm now looking at Interactive Brokers who are famous for their cheap fees and bad customer service ^_~
I thought it a good idea to be absolutely sure what the fees are so I can decide whether to continue investing or not. I tried ringing IB but as you might guess they weren't helpful and kept saying I should look at their fees on the website which isn't very helpful given I have no idea what some are referring to.*
I'm only interested in buying and selling shares so I'm not concerned with fees regarding futures etc just all the fees regarding buying and selling US shares from the UK. If anyone could help me I'd really appreciate it. Given IB CS is much worse and much less helpful I don't have many other options in understanding which fees apply to me.*
Thanks in advance and sorry for the long rant
It's just frustrating to make these losses due to this instead of bad investment choices. Especially when the stocks went on to do well right before my eyes after I'd recently sold for a quite a large loss.
Thankfully I wasn't fully invested and the portfolio is only down 3%, but since all the money belongs to a silent partner I'm not willing to continue using money not mine unless I find cheaper fees to give me more flexibility and reduce the already high risk with regards to foreign investments, or even general investments form that matter >:-(
Finally sorry if this isn't the right place, wasn't sure where to place this thread but came here and saw threads regarding brokers.
However the investment strategy I use is the CANSLIM model founded by William J O'neill and as a result it was difficult to use the system for uk stocks and the easiest method seemed to be to subscribe to their daily newsletter and use their website and newsletter to screen for stocks which meet the CANSLIM criteria.*
Enter all the problems
(Here I started to diversify my portfolio to reduce the level of risk)
Around the beginning-mid December, I invested in 2 stocks. I bought YNDX at $43.22, a little higher than the proper $41.90 entry, and ALXN at $128.73 from a buy point of just below $127. Upon buying both of these stocks I was met with a nasty surprise. I noticed that the exchange rate I was being quoted didn't reflect what I found online and it is here that I learned of the hidden FX charges. In this case I was with Hargreaves Lansdown who charge a ridiculous 1.7% FX commission. They also insist on settling everything in GBP. It meant when I bought a stock I was already 1.7% down. If I wanted to sell the stock straight away I'd lose another 1.7%.
Commission is a flat fee but due to diversifying my portfolio and using smaller chunks of money it ended up being 0.5% and 1% (the money wasn't split equally) of my investment in the stocks. In others words I was already down 4.4%-5.4% as soon as I'd bought the stocks. Given I have a sell strategy where I sell if the stock falls 5-8% from my buy price (of which I stick to the lower end) it leaves me with very little wiggle room. Fast forward the market got hit hard and I ended up losing just under 10% on YNDX. With ALXN, the stock fell from 10% profit to 8.5% at which point I sold, but since I lost 1.7% due to FX charges when buying, and another 1.7% when selling, plus the fact that the exchange rate fell 1.4%, that killed over half my gains leaving me with just approx 3.8% profit.*
Once I discovered the hidden FX fees I moved over to another broker, Stocktrade, who allowed multiple currencies to be held in the same account. Hence I could convert the money into dollars and lose 1% in FX commission. But that was fine as that money was going to be used for investing for the long term, investing in multiple stocks. I then bought QIHU at $93. But I ended up paying an overseas settlement charge of £50 which was 0.7% of my investment. Commission is charged at 0.5% so in this case I was down almost 2.5% as soon as I started. I ended up losing another 8-10%. Ironically I ended up losing more money as the 2.5% automatic loss (and the higher 4.4-5.4% with HL) forced me to close my positions earlier than I'd like. As a result, I made an 8-10% loss on QIHU after which the stock ended up rising the next day to reach my buy point and surpass it.*(It went on to rise almost 10% in profit a day/two ago).
The point of this post is I'm sick of getting screwed over by fees. All of these stocks I should have made a profit on, or lost very little on. I have no problem with a stock rising 5%, coming down to 1% and selling to make 1% profit. That's fine with me. If I did that a few times then I can take a bigger risk and let a stock have a natural dip down from my buy point and wait for it to come back up and surpass my buy price (as was the case with QIHU, of course my max loss of 8% on a stock still would apply).*
So I'm now looking at Interactive Brokers who are famous for their cheap fees and bad customer service ^_~
I thought it a good idea to be absolutely sure what the fees are so I can decide whether to continue investing or not. I tried ringing IB but as you might guess they weren't helpful and kept saying I should look at their fees on the website which isn't very helpful given I have no idea what some are referring to.*
I'm only interested in buying and selling shares so I'm not concerned with fees regarding futures etc just all the fees regarding buying and selling US shares from the UK. If anyone could help me I'd really appreciate it. Given IB CS is much worse and much less helpful I don't have many other options in understanding which fees apply to me.*
Thanks in advance and sorry for the long rant
It's just frustrating to make these losses due to this instead of bad investment choices. Especially when the stocks went on to do well right before my eyes after I'd recently sold for a quite a large loss.
Thankfully I wasn't fully invested and the portfolio is only down 3%, but since all the money belongs to a silent partner I'm not willing to continue using money not mine unless I find cheaper fees to give me more flexibility and reduce the already high risk with regards to foreign investments, or even general investments form that matter >:-(
Finally sorry if this isn't the right place, wasn't sure where to place this thread but came here and saw threads regarding brokers.
