Sunday, August 11, 2013

On the broker fee

They said the best teacher is your experience.

I couldn't agree more.

Before I invested big.. I bought 2000 units of shares for a trial run.

Little did I know about the brokerage fee. So let me explain to you a little bit on brokerage fee..

It's actually somewhat like a service fee to your remisier/broker. Every company has different charges. As of TA (the ones I'm using), it's 0.7% per transaction but minimum charges at RM42. When I said per transaction means that RM42/0.7% when you buy and another RM42/0.7% when you sell.

What I'm gonna share from my second jual beli saham:

1. Be very patient. Buy the shares when the price drops, not according to rumors or prediction. I bought mine when the price was quite high because I predicted the price was going up as days passed by but it dropped a couple of days after I bought mine.

2. Bare in mind on the broker fee. It affects your break-even especially if you buy in a small amount. For example I bought mine at RM 1/unit  × 2000 units = RM 2000. To break even, we add with the broker fee RM 2000 + RM 42 (buy)  + RM 42 (sell) = RM 2084. Which makes the break even RM 2084/2000 units = RM1.04. Meaning you can only gain the profit after the price of the shares increase more than RM 1.04.

Whereas if you buy more, eg. 6000 units, break even is RM1.014.

3. Set the percentage that you want to gain the profit and don't be greedy. My target was 25% clean profit, but I sold mine at 7% clean profit in less than a month due to the fact that:
1- Bought it at a quite high price.  To wait for 25% profit will need a long time.
2- The break even factor
3- A little bird told me the price is gonna drop soon. I know I said don't trust in rumours.  But shares is a high risk investment. Anf if you're not a risk taker, I wouldn't suggest you to proceed with this.

All the best, friends. I'm waiting for the price to drop for my third cycle. Doakan!

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