The Starter Investor Trading Profit Formula
TRADING PROFITS ARE RECKONED according to the formula suggested by Benjamin Graham, author of the book The Intelligent Investor: The Classic Text on Value Investing.
The use of this equation was illustrated in a previous post entitled Measuring Our Stock Trading Profit. We define trading profit as the difference between the previous total sell price and the new total buy price.
Hence, our stock trading operating cycle starts with our cash position which is then converted into our stock portfolio upon completion of our buying order. Selling our stocks creates receivables. Upon collecting cash from the sale transaction, the operating cycle starts anew when we use the cash collection to pay for our new buying order.
Swing Trading
Swing Trading is, at this time, the primary business activity that drives our stock trading operating cycle, as well as our main profit generator.
Trading Profit Updates
The main goal of our operations is to demonstrate how many trading cycles it will take before we double our money.
We achieve this by generating a trading profit of at least 4,050 pesos based on initial trading capital mentioned in one of my previous posts Awakening of the Marginal Investor or Speculator.
| Cycle No. | Date | Shares | Total Buy Price | Total Sell Price | Trading Profit | Profits To Date | |||||
| 23-Feb-09 | 20 | 4,055 | - | - | - | ||||||
| 27-Mar-09 | 20 | - | 4,414 | - | - | ||||||
| 1 | 01-Apr-09 | 20 | 4,067 | - | 347 | 347 | |||||
| 17-Apr-09 | 20 | - | 4,434 | - | |||||||
Last Update: April 26, 2009
This post is updated regularly with the latest completed Stock Trading Operating Cycle.
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