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Saturday, July 7, 2018

One of the way to earn income is by doing stock market trading.
This is what some people are doing.
In order to do this, you need to learn some basic trading skills.

Question: How do I know how much I need to earn?
It's good that you can start with an end in mind.
Example, your objective for trading is for you to replace your monthly expenses or salary income.

Example:
Monthly income: RM5000
Yearly income: RM5000 x 12 = RM60,000
In order to generate RM60,000 per year, with a 5% gain per month, or 60% per year, you need capital.

Calculate Capital needed:
RM60000/60% = RM100,000

It means that, you can start with RM100,000, use it to generate 5% per month through trading.
It means, every 10 days, you can try to generate 5%/3 = 1.67%.

Let's say you buy a share that cost RM1.50.
For it to gain 1.67%, it will become RM1.52, and you sell.

Let's say you start with about RM10000 capital as initial training.

This is how you start.

RM10,000 / RM1.50 = 6666 shares.
Since for Malaysia stock market, you can only buy in 100shares.
So you can buy 6600 shares.

Cost: 6600 x RM1.5 = RM9900.
Include also the cost of brokerage of buying and selling = RM12 x 2 = RM24

When the share market gain to RM1.52:
RM1.52 x 6600 = RM10,032

Therefore the gain is:

RM10,032 - RM9900 - RM24 = RM108

Gain = RM108 / (RM9900+RM24) = RM1.08%

Gain will reduce due to fees.
So, the lower the fees, the better.






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