How Fixed Trading Commissions Quietly Eroded a 2:1 Strategy to 0.75:1

A trading bot designed with a standard 2:1 reward-to-risk ratio consistently delivered worse results in live trading than backtests suggested, despite stop-loss and take-profit orders executing exactly as intended. The root cause was that round-trip commissions, ranging from $0.92 to $1.78 per trade, consumed a disproportionately large share of losses relative to gains. Because the strategy used ATR-based stops — keeping dollar risk narrow by design — the near-fixed commission cost represented a much bigger fraction of each losing trade than each winning one. This asymmetry dragged the realized ratio down toward 0.75:1 without any flaw in the exit logic itself. The analysis recommends widening stops, scaling up position size where rules allow, or deducting expected commission costs from edge thresholds before approving any trade signal.