# The Two Costs of Trading

Canonical: https://tradersdailydirection.com/the-two-costs-of-trading/

Hey friend,

Let’s see how the markets have been moving as we enter the middle of the trading week.

## The Daily Direction

![](https://tradersdailydirection.com/wp-content/uploads/2023/08/Screenshot-2023-08-18-at-10.05.29-AM-1024x236.png)

**Note:** Another largely downward close for the indexes yesterday as markets looked toward Powell’s Jackson Hole speech later this week. No change in any index directions, however.

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## The Daily Nugget

**_Every trade has two costs – the cost of entering the trade, and its opportunity cost._**

Most people only consider the first cost – how much capital they need to risk to get into the trade.

But they rarely think about the second cost – the opportunity cost, the cost of not taking a trade _(with that same capital)_ that could have been more optimal.

There’s nothing we can do to eliminate opportunity cost.

But we can always keep it in the back of our minds – as a reminder to not be reckless when entering trades.

If the market is not conducive to your strategy right now – just don’t trade for a while, and save on both costs. You’ll do better in the long run.

_**The Traders Agency Team**_

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