Blog PostNotes From a Cyber Trader - Why I Trade Penny Stocks

Note, on Dec 24, 2010 my balance was in the $128,000 range and I withdrew $5,000.00)

December 2010 results
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I am a retail trader and all of my trades involve TSX Venture Exchange companies. 

My "Why I Trade Penny Stocks" posts are meant to shed  light on some of the workings of trading from your RSP and TFSA accounts.

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The following 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 penny stocks at the beginning of Nov 08 with $13,567.48 in my RSP.

I transferred $10,000 in Jan 2010 from my RSP trading account to a TFSA trading account.

Current account balances are detailed below the next chart.

(I blotted out the account numbers.)

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December 2010 Results

Experienced a large drop in number of trades for the month of December from November (down 51 trades and nearly $5,000.00.)

By the end of November I sold many of my holdings and had trouble picking stocks on the cheap as many of the penny stocks were holding their recent highs or moving up slightly.

Plus with the holidays and Christmas parties I experienced lower trading volumes on the exchange.

Also our exchange should stay open like the US. They were open on Dec 27 and 28 and ours were closed.

By the way I find it more challenging to watch over two trading accounts versus one. I didn't pay as much attention to my  TFSA as I should have. Maybe with more experience, It'll get more manageable.

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Most of my stocks are under 10 cents but are creeping up because this is the time of year higher volume trading returns to many of these penny stocks. 

My gross sales for December 2010 were $ 6,384.80

Net =  $5,516.05

(125 trades @ 6.95 = $868.75)

(September 2010 was my highest net sales month this year @ $13,187.70.)

My combined total last year Dec 31/09 was $62,630.66 - Dec 31/10 its $122,429.86* - up $59,799.20.

( * Note, on Dec 24, 2010 my balance was in the $128,000 range and I withdrew $5,000.00)
( * In total I withdrew $15,000.00 this year - $5,000 in Oct, Nov, and Dec.)

I'm back to maintaining a 45 to 55% cash balance. 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.

I like down days as it allows me to scoop up stocks to sell. I always need stocks to sell if I'm going to keep making money every day. Got to keep reloading the account.

Keep in mind, because I trade over 600 trades a year, RBC Direct charges me $6.95 a trade (as a hyperactive trader).

I do not recommend them as their platform fails often.

Word of Caution - Penny stocks are extremely volatile so stick to a strategy - especially an exit one.

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I've included several screen shots of my December - 2010 results.

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Following is my monthly day-timer

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Daily Pre-trade Balance with Sales Breakdown for December 2010

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December's last RSP Balance

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December's last TFSA Balance

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RSP partial Activity Page - End of Month for December 2010

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TFSA partial Activity Page - End of Month for December 2010

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Thanks for checking out my page. Red Mars

My current short term combined account goal (RSP & TFSA) is $131,000.00