May 2011 results________________________I am a retail trader and my trades involve TSX Venture Exchange companies.
My "Why I Trade Penny Stocks" posts are to highlight my strategy on trading stocks through a discount broker using my RSP and TFSA accounts.
An immediate benefit of trading under these types of accounts is not having to complete annual tax forms or paying annual taxes unless I am redeeming funds from my RSP.
An even better benefit is not paying any taxes when redeeming funds from my TFSA.
I do not recommend any of the stocks I trade. All are very volatile.
The goal is to make enough positive trades to make up for the losing trades and still make a return.
Many of my past posts give more insight on why and how I apply my strategy.
The following performance chart is taken from my RBC Direct Investing Account. It tracks the progression of both my RSP and TFSA trading accounts.
It only goes back as far as Jan 09
I started trading/flipping penny stocks aggressively at the beginning of Nov 2008 after the crash with $13,567.48 left in my RSP.
In January 2010, I redeemed $10,000 from my RSP trading account and started a TFSA trading account with it.
My current "Rate of Return" percentages are detailed in the chart below.
(I blotted out the account numbers.)
The spring/summer months slowdown has kicking in._______________________________________________________________Most of the stocks I trade are under 10 cents. I did not redeem any cash in May. Its time to buildup my equity again.
(I redeemed $15,000.00 in the last three months of 2010 from my RSP account.)My gross sales for May 2011 were $ 2,965.60
Net = $ 2,395.70
(82 trades @ 6.95 = $569.90)
(My May 2011 net trades are 40% of last year's May net trades. June trades may prove to be just as dismal.)
My cash balance now fluctuates between 35% to 45%. This allows me to scoop up any of the regular stocks I trade on dips and place an immediate sell at 1/2 to 1 penny move. For a stock that trades at 10 cents that's a 5 to 10% profit.
With the summer slowdown in trades, I've picked more cheaper stocks which knocked down my normal cash balance from 45% to 55%.
My strategy here is if my stock pick normally trades at 8 to 10 cents and the summer slow down pushes the channel trading to 6 to 8 cents I had cash on hand to participate in the new channel.
I keep the stocks that I bought earlier at the higher price as over the summer months some of stocks spike on news or get pushed up by unexpected buying prior to a positive news release.
Because I'm vested in over 25 stocks, a few of them always trade positive. I just never know which ones.
I expect my balance to be volatile during the summer months and lean downwards. The goal is to keep my net trades up and add to the balance. Come Fall when prices lean upwards my balance spikes as I did not dump my stocks at a loss in the Summer.
Having kept cash on hand I was able to still channel trade at the lower prices. Whereas in the past, if I had not kept cash, I had to wait out the Summer or worse sell at the worst time.
A further motivating factor to follow this strategy was I need to keep trading in order to keep my "active trading" status to continue enjoying the $6.95 trading commissions. If I failed to maintain my minimum trade requirements, the bank is quick at charging the higher commissions.
Word of Caution - Penny stocks are extremely volatile so stick to a strategy - especially an exit one._____________________________________________________________________I've included several screen shots of my May - 2011 results.________________________________________________Following is my monthly day-timer_________________________________________________Daily Pre-trade Balance with Sales Breakdown for May 2011
May's last RSP Balance
May's last TFSA Balance
RSP partial Activity Page - for May 2011
TFSA Activity Page - for May 2011
I am not a professional trader nor have education in the subject. I have an underwriting background in insurance risks for design professionals and construction projects. Working with risks, numbers and percentages is how I made the transition to trading stocks.
Related Posts:Why I Trade Penny Stocks - Part 30Why I Trade Penny Stocks - Part 32Penny laneThanks for checking out my page. Red Mars
My current short term combined account goal (RSP & TFSA) is $139,000.00
"To turn $100 into $110 is work. To turn $100 million into $110 million is inevitable." Edgar Bronfman