One of my stock investor friend, Eugene, once suggested this rule in our exchanges in a stock investment forum.
To put it in simple terms for every trade you place the value of that order should not be lower than 8,000 pesos to maximize the use of your online broker’s commission fee.
If you remember only 15% actually profit in the stock market in the long run that is why you have to maximize whatever cost you incur in your trades if not to profit at least to breakeven.
Online stock brokers have a commission rate of 1/2 of 1% or a minimum of 20.00 pesos which ever is higher. The commission rate is actually equal to 20.00 pesos as well thus by placing an order at least amounting to 8,000.00 pesos you are able to maximize that cost you incur every trade.
That is why as a rule I always place a buy or sell order not below 8,000.00 pesos.
Subscribed and receive latest post for free by entering your email in the box below:
Delivered by FeedBurner for Investing in Philippines