Online Stock Trading
ONLINE STOCK TRADING took a back seat for while when Marginal Stock Trader got himself employed in a business process outsourcing company conveniently located along Ayala Avenue, Makati City, Philippines.
Holding on to cash
For the past six months since 17 July 2009 when we started tracking our BPITrade trading account weekly equity balance, Marginal Stock Trader completed only three purchases.
Nevertheless, we decided to close all our outstanding positions and hold on to cash when our total trading account equity of 10,000 pesos went down almost 5% by the end of November 2009, following our 6% Monthly Loss Limit Rule. We ended the year with a cash position of 9,481 pesos in our online trading account.
Accumulating equity
We have a total starting capital of 3,500 pesos as of 19 May 2009. We allocated 3,000 for our stock trading activities and 500 pesos for our BPITrade account minimum balance requirement.
Then we made a second capital infusion 3,000 pesos on 18 June 2009 to finance the purchase of a second Ayala Corporation shares board lot, making us a holder of 20 AC shares.
On 26 June 2009, we contributed another 3,000 pesos to build a total equity of 9,500 pesos. This allowed us to buy our third board lot increasing our accumulated holdings to a total of 30 AC shares.
We were able to complete on 17 July 2009 the first step to building our first one million pesos when our total equity reached 10,000 pesos with additional funds of 500 pesos coming from our savings program.
Building wealth
Looks like building wealth is a desirable goal filled with temptations and setbacks. There is a huge temptation during implementation to move away from the rules and plans you put in place at the inception of online trading activities. The result of course could be undesirable because instead of growing our equity, we could end up with more losses than profits.
Indeed, the whole idea of day trading or weekly trading to build wealth when our fund is limited should be reviewed. Our experience tells us we could have ended the year 2009 in a more positive note -- even if we consider our worst decision of buying 10 AC shares at the top -- had we just bought and then held our position as of 26 June 2009, staying on the sidelines and avoiding trading altogether.
But we played the role of a weekly trader, online trading is our game, and so we traded.
Trading outlook 2010
We might stay on the sidelines for while from trading AC shares unless some really really great motivation to trade comes up. Forget about day trading or weekly trading for us. There is no sense making a quick trade and lose money as quick. All indications point to swing trading for us hence. Walk the talk. Follow the plan. Align with the rules. That is what we are going to do.
Tracking trading performance
We remain cognizant of the purpose of this website: to keep track of our progress being an online stock trader. Watch out for the action. We will tell you what's going on in our trading account. Let's expect some good news and build wealth through online stock trading.
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