Does Trading More Often Hurt Your Return? What IDX Fees Do to Your Money
5 min read
Loading...
5 min read
You buy a stock on Monday. By Friday it is up 0,3%. You sell and feel smart.
But you lost money on that trade. The fees ate more than the gain.
So does trading more often hurt your return? On the IDX, fees are part of the answer. This post turns them into rupiah, so you can see what trading once a year, once a month or once a week really costs.
Each time you buy or sell a stock, a few small costs are taken out. They look tiny. They are not, once you repeat them.
Search results for common Indonesian broker fee guides (Cermati, Ajaib) describe the usual pattern:
Each broker sets its own rates, and they change. Treat these as typical numbers and check your own broker's fee page. I could not find an official IDX or KSEI table, so these figures come from broker education pages, not from the exchange.
A round trip means one buy plus one sell of the same stock.
Add the typical numbers: 0,15% to buy, 0,25% to sell, 0,1% tax. That is about 0,5% per round trip, before the small levies.
The simple meaning: the price must rise about 0,5% before you break even. If it rises 0,3% like in the story above, you lose.
Fees are not the only cost. The gap between the buy price and sell price, the bid-ask spread, makes it worse on thin stocks. This post leaves it out to keep the math clean.
This is NetWort arithmetic with assumed numbers. It is not real investor data.
Imagine Rp100 juta. Every strategy earns the same 12% a year before costs. The only difference is how often you sell everything and buy again. Each round trip costs 0,5% of the portfolio.
| Habit | Round trips a year | Cost per year | Value after 10 years |
|---|---|---|---|
| Buy and hold | 0 | none in the model | about Rp311 juta |
| Trade once a year | 1 | 0,5% | about Rp295 juta |
| Trade every quarter | 4 | about 2% | about Rp254 juta |
| Trade every month | 12 | about 5,8% | about Rp170 juta |
| Trade every week | 52 | about 22,9% | about Rp23 juta |
Same stocks. Same 12%. The only change is how often the fees hit.
The monthly trader ends up with about Rp141 juta less than the buy-and-hold investor. The weekly trader loses most of the starting money. Real people rarely rotate the whole portfolio every week, so read the last row as a warning about direction, not a forecast.
The model above uses fees only. Research on real investors shows the same direction.
Brad Barber and Terrance Odean studied 66.465 US households from 1991 to 1996. The households that traded the most earned 11,4% a year. The market earned 17,9%. (Journal of Finance abstract, via search summary; I did not open the full paper.)
Costs are only one reason. The authors link heavy trading to overconfidence too. Read more in our post on overconfidence bias.
Trading more is not a crime. Some investors trade often and do fine, and some need to sell for real reasons: a goal date, a change in the company, or rebalancing.
The problem is trading that comes from boredom, fear or excitement. A useful test is to write down why you are selling. If the reason is "it moved a bit", the fee has already decided the result.
For how fees stack up inside a whole portfolio, see our post on portfolio turnover and what it costs you.
If any answer feels weak, wait a day.
Open the NetWort Dashboard and look at your total return next to your transaction history. Count your trades from the last 12 months and multiply by your fee. The number may surprise you, and it is the best reason to trade less or the best proof that your habits are fine.