Commission Sets Your Minimum Holding Period

Every trade starts negative: spread + commission. The shorter the horizon, the more costs dominate.

If your average move is small relative to friction, your win rate becomes irrelevant. You are paying for activity, not earning edge.

Many traders overtrade because they do not translate costs into required movement.

Execution reality: the market you backtested is not the market you trade. Spreads are stateful, liquidity is time-of-day dependent, and fills degrade exactly when your stop becomes most sensitive.

• Track spread-to-ATR (or spread-to-range) as a live risk input, not a “cost”.
• When spreads widen, your effective stop tightens and your R:R collapses.
• If your edge needs perfect fills, your edge is mostly fictional.

Ignore costs → trade frequently → friction dominates → negative expectancy → more trades to fix it → drawdown.

How it kills accounts:

1. Edge looks fine in backtest.
2. Live spreads widen at the exact wrong moments.
3. Stops trigger inside noise, so you widen stops.
4. Same size + wider stop = silent leverage increase.
5. A normal spike becomes structural damage.

Convert costs into 'minimum move' and refuse trades below that.
If you want to trade small moves, you need exceptional execution and low costs.
When in doubt: trade less.

Rule that survives:

• Spread is a gate, not a footnote. If it’s abnormal, you don’t trade or you trade smaller.
• Assume worst-case fills in fast markets.
• Size is the adapter: reduce size before changing the stop model.

Your average target is 6 ticks. Your spread+fees average 4 ticks. You need near-perfect timing just to break even. The strategy is a treadmill.

Tell: if the trade only works when the spread is tight and price is smooth, it’s not an edge, it’s a regime bet.

Simple calculator

Required move = spread + commission + expected slippage. If your setup does not routinely exceed that, it’s not a setup.

Glossary: expectancy, spread, opportunity cost.

Field checklist

• Measure spread before entering. If it’s abnormal, you’re trading the wrong product at the wrong time.
• If volatility expands, reduce size first. Don’t “solve” it by widening stops with the same size.
• Avoid the predictable liquidity holes: rollover, session open/close, first minutes after data.
• Assume your stop may fill worse than your entry. Price the worst-case, not the brochure.
• If you cannot explain where liquidity comes from, trade smaller.