7. Some knowledge on Shares trading with Rakuten Trade

After reading my previous post, a few have reach out to me asking more about Rakuten Trading. On this post I will share some basic knowledge I learnt using Rakuten Platform.

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Nominee Trading Account

There are 2 types of Shares Trading Account a Primary trading account and a Nominee Trading account. Rakuten is a Nominee Trading Account, hence why the sign up process is extremely easy and straight forward. On a nominee account you can’t purchase IPO’s (Initial Public Offerings). This would be the biggest drawback for me. As an alternative option I use Maybank trading acount to purchase IPO. Apart from the options to purchase IPO’s I love the convenience of Rakuten Trade(atleast as a beginner).

Account Types

Rakuten has 3 account types, Cash Upfront, Contra, and Combo.

  • Cash Upfront, as the names says it all : You have the money you buy it, no money, no business.
  • Contra: You can take a loan to purchase shares and payback in 2 days time.
  • Combo : Its a combo both cash upfront and contra.

Me personally considered CONTRA account a risk, as why would I invest money which is not mine taking into consideration of the risk that I might lose all of it. So I settled down for a Cash Upfront account and invest only when I have the money.

All about the $$ MONEY!

Please be aware of the risk involved while trading. Share Market is not about making easy money, you can make money or lose as well.

Expect Loses

An example about 2 to 3 months ago AirAsia(5099) share price was ranging around RM1.60 per share and 2 week ago the price dropped to about RM0.70 (Seventy cents per share), a drop of almost 56%. To put this in numerical format

Number of SharesPurchased 2 Months AgoSold 2 Weeks AgoTotal Loss
1 Share RM           1.60 RM        0.70-RM      0.90
500 Shares RM      800.00 RM    350.00-RM 450.00

Make Profits

One of the first few shares I purchased following a trade tip by Rakuten Report, was ECONBHD (5253) at RM0.58 (fifty eight cents per share) and purchased 1700 shares with some extra cash I stored up somewhere. I sold it 2 or 3 months later at RM0.78 cents per share. Raking a profit of RM323.

 Number of SharesPurchase PriceSold PriceProfit
1 Share RM           0.59 RM          0.78 RM      0.19
1700 Shares RM  1,003.00 RM  1,326.00 RM  323.00

Another share I am proud of was purchased based on my own personal research was SMTRACK (0169). The purchase was made following a report of a local company working with Garuda Indonesia to start a low cost carrier in Malaysia. I sold the shares a few months later.

Number of SharesPurchase PriceSold PriceProfit
1 Share RM           0.12 RM          0.25 RM      0.13
2000 Shares RM      236.00 RM     500.00 RM  264.00

Dividend Payouts

Another option of making some money on Rakuten would be through Dividend Payout’s. One good example was on my initial purchases. As I mentioned I was always enthusiastic for a few months before I give up, so during the first stretch of enthusiasm I purchased some 1000 shares of AirAsia (5099) with an averahe of around RM1.81 per share or a total RM1.8k for 1000 shares. A month or 2 after I gave up investing Tony Fernandez announced a Dividend Payout of RM0.90 (ninety cents) per share. That gave me a profit of about RM900 and the value of my shares shot up by almost 80 cents with the announcement (Sadly that was the last dividend payout 😥 by AirAsia). At first I didn’t know the meaning of Dividend Payouts but I learnt it after Tony Fernandez announced that he is giving me some money for investing with AirAsia.

Number of SharesPurchasePriced on 30th MayProfit
1 Share RM           1.81 RM          2.60 RM          0.79 RM      0.90
1000 Shares RM  1,810.00 RM  2,600.00 RM     790.00 RM  900.00

Non Profit Organization

Now Rakuten is in no way a non profit organization so there are some cost involved. Rakuten charges you a brokerage fee and there are other cost involved as well.

Taken from Rakuten Website on 22nd April 2020
Taken from Rakuten Website on 22nd April 2020

Some regular functions I use

Stock Screener

I use the stock screener function to filter and survey stocks to purchase or compare with. There are various filters which would be good to familiarize with.

News and Report

There are some good reports that are shared it helped me make some profits for my first few trades. But do not completely rely on this reports (I made some loses using this reports as well).

The reports section shares news you might miss out that would help with decision to make a purchase.

Watchlist

There are almost 1000 companies listed on Bursa, within 28 sectors. Each of this company has a unique Name, Code and Symbol to them on Bursa. Unless you have a brain of an elephant you would not be able to track the performance of all of them. So you select a few you like to follow and maintain them in a list. I have a few watchlist (The stocks that I own, The REIT funds I like, some high dividend paying stocks and some financial institutions).

Order Status

Next most important tab will be he Order Status. Buying a stock is not as easy as just buying a stock. You need to add in your assumed value of the share price that you are offering to pay and then the system matches your purchase when the company matches to the value you offered. Why this is important is especially when you have fat fingers and you are using a phone to make transactions.

1 bad experience I had was when I pressed sell instead of buy (the button was side by side) and kept my phone aside without checking the offer status. The value of the share was low and hence I wanted to purchase, instead of buying something at low value I sold it making a lost of over RM300.

LESSON TO LEARN : ALWAYS CHECK ON ORDER STATUS FREQUENTLY.

Company Summary

Among everything I consider this to be the most important info of all info. This is basically where you are putting in your money. As an extreme beginner I like to analyze what I call speculator trend as an ‘indicator'(Indicator because of the various other info I take into considerations before making any purchase) if I should purchase something.

The table shows peoples opinion (Emotions) and the trend of where the market ‘MIGHT’ turn towards.

Conclusion

Shares are interesting you can make some money but you can lose them as well, The risk factor is very high. Invest at your own risk. Study what you are going to purchase (its not the same as buying vegetables at the market).

Rakuten Trade for me at least is an excellent platform to start shares trading.

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