OnlineTrading Monthly Results

HIS ONLINE STOCK TRADING PLAN, STRATEGIES AND IDEAS already tested and updated after a period of almost 12 weeks in a live trading environment, Marginal Stock Trader finally decided to close all his outstanding positions this month in preparation for a fresh start by August 2009 and this time with little bits of trading lessons learned here and there.

Start low
We said in one of our early post Make a Living As a Day Trader that we would start with just one trade per week and a very low weekly profit goal of 30 pesos. We managed to make 6 trades out of 12 weeks and even made a weekly profit of 29 pesos as of May 2009 on the average.

Delayed reaction
Beginning June 2009, we started to learn something about technical analysis, Japanese candlesticks, long position and short position, and Minor Top and Minor Bottom. We made decisions based on our understanding of technical indicators. We also tested the limits of our stop loss strategy based on the Minor Bottom of 270 pesos for Ayala Corporation stock at that time.

This month's result was a disaster. We got our first lesson in losing money through our biggest single loss so far of 370 pesos equal to about 4% of our trading equity. We looked away from our original stop loss rule and ended up selling at the bottom price of 265 pesos.

Add to this is our misreading of the trend that triggered a decision to go long on Ayala Corporation at 312.50 pesos, which turned out to be the top for an entry price.

Loss-limit system
By the 9th week since we entered our first order in live trading at the Philippine Stock Exchange through our online broker BPI Trade, Marginal Stock Trader added an important element in our stock trading plan that allows us to better put a cap on our losses: a loss-limit system.

This system placed our single trade loss limit at 2% and our maximum monthly losses at 6% based on our equity in our trading account. Our Weekly Total Equity Tracker shows that as of July 24, 2009, our month-to-date losses was cut by more than half to about 3% compared to 7% a week before.

Stock portfolio
For the period May 11, 2009 to July 27, 2009, our stock portfolio consisted of just one issue, Ayala Corporation, our online broker is BPITrade, and we only trade common stocks at the Philippine Stock Exchange.

BPITrade Fund Withdrawals

BPITRADE WITHDRAWAL PROCEDURE to get the money out of our trading account is easy. But for those new to BPITrade here is how to go about getting hold of your funds. By the way, this post is in response to a question we received from one of our readers:

Subject: Question lang po

From: Jun
Date: Wed, Jul 22, 2009 at 10:08 AM
Subject: Question lang po
To: Marginal Stock Trader


Sir Good morning po.

Pano po ba magwithdraw from BPI Trade? Di ba punta lang sa Services tapos Withdrawal, then indicate ung amount.
Automatic ba un mapunta sa account ko sa BPI Savings, un ginamit ko para magtransfer ng fund sa BPITrade using
Expressonline?

Matagal po ba bago matransfer?

Salamat.

Withdrawal Procedure
Correctly, our reader Jun had already answered in part his own question. Let me just add more details.

Step	Action
1	Sign-in to your BPITrade account
2	Go to Services
3	Click on the link Withdrawal Request
4	Fill up the amount to be withdrawn in figures and in words and click the Submit button.

The amount withdrawn will be available on your nominated beneficiary account (BPI savings or checking account with ATM card) the next day.

Weekly Total Equity Tracker

MARGINAL STOCK TRADER tracks his BPITrade trading account weekly equity balance through this post. For that purpose, we have adapted the system suggested by Jason Van Bergen in his Investopedia article Limiting Losses.

Week	Date	Cash Position	Stock Position	Total Equity		% Gain/(Loss)		Remarks
	17-Jul-09	10,000	-	10,000				beginning equity, this year
29	18-Jul-09	970	8,325	9,295		(7.1%)		stopped trading
30	24-Jul-09	6,816	2,900	9,716		(2.8%)		closed 2 of 3 positions
31	31-Jul-09	6,816	3,000	9,816		(1.8%)		ending equity, this month
32	07-Aug-09	9,567	-	9,567		(2.5%)		traded 30 shares, closed all positions
33	14-Aug-09	9,567	-	9,567		(2.5%)
34	20-Aug-09	9,567	-	9,567		(2.5%)
35	28-Aug-09	9,567	-	9,567		(2.5%)
	31-Aug-09	9,567	-	9,567		(2.5%)		ending equity, this month
36	04-Sep-09	9,567	-	9,567		-
37	11-Sep-09	9,567	-	9,567		-
38	18-Sep-09	9,567	-	9,567		-
39	25-Sep-09	9,567	-	9,567		-
	30-Sep-09	9,567	-	9,567		-		ending equity, this month
40	02-Oct-09	9,567	-	9,567		-
41	09-Oct-09	9,567	-	9,567		-
42	16-Oct-09	9,567	-	9,567		-
43	23-Oct-09	9,567	-	9,567		-
44	30-Oct-09	6,544	2,925	9,469		(1%)		bought 10 shares @ 300
	31-Oct-09	6,544	2,925	9,469		(1%)		ending equity, this month
45	06-Nov-09	6,544	2,950	9,494		0.3%
46	13-Nov-09	6,544	3,025	9,569		1.1%
47	20-Nov-09	6,544	3,025	9,569		1.1%
48	27-Nov-09	6,544	3,000	9,544		0.8%
	30-Nov-09	6,544	3,000	9,544		0.8%		ending equity, this month
49	04-Dec-09	9,481	-	9,481		(0.7%)		sold 10 shares @ 297.50
50	11-Dec-09	9,481	-	9,481		(0.7%)
51	18-Dec-09	9,481	-	9,481		(0.7%)
52	25-Dec-09	9,481	-	9,481		(0.7%)
	31-Dec-09	9,481	-	9,481		(0.7%)		ending equity, this month
	31-Dec-09	9,481	-	9,481		(5.2%)		ending equity, this year

Last updated: February 22, 2010
Marginal Stock Trader calculates his equity each week. This includes all of the cash in his BPITrade trading account, cash equivalents and the current market value of all open positions in the account. This weekly total is compared with the equity total on the last trading day of the previous month and, if we are approaching the 6% threshold, we prepare to cease trading.

In fact, when our 6% loss-limit level is breached, we may -- depending on our appraisal of the situation -- go even further and close all of our outstanding positions, and spend the rest of the month on the sidelines.

Employing a 6% monthly loss limit allows Marginal Stock Trader to hold three open positions with potential for 2% losses each, or six open positions with a potential for 1% losses each and so forth. For more, read our previous post Loss-Limit System for Traders.