A.I.M. Users Bulletin Board

[Vitaali]

Hi Adam!

Quote:

“What you do is a step above that by actually buying stock at that level to decrease the cash level. So when you buy the stock amount do you increase the PC by the value of the stock or by half of it?”

I don’t use Portfolio Control at all. So there is nothing to increase. I devised my own method that tells me how much and when to buy and sell.

Doing Vealies and not participating in the price rise and locking in those paper profits doesn’t make sense to me at all. Imagine the stock rises, and you do Vealies as it goes up. Then price reverses, comes down to the same level where you started to do your Vealies. At this point your account hasn’t changed in terms of profit or loss. (Maybe you are even showing a loss if you were buying more shares on the way down). You are back where you started. But you could have done a much more profitable thing instead. You could have bought shares instead of doing Vealies, to get your Cash reserve to the proper level. If the price does the same thing as in the first example, you have a realized gain because you were locking in gains on the price rise. In scale trading being proactive is much more profitable than sitting on the sidelines and doing nothing.

Vitali