StockCharts Support Forum

[Peter_Pan]

Thanks for your explanation.
One thing bothers me with that system: Leveraging Down.

As a long-time technical investor myself, I learned to never average down, it can cost you your entire portfolio if you're not careful.

The system you talk about can be good if you simply "follow the trend". One can use a daily (or weekly) moving average (MA), or a combination of 2 or 3 MA. Here's a simple well-known MA system:

Daily MA 7 - 27 - 50.
As long as the stock is above the 50, you surf with the trend. If 7 crosses down 27, it's a yellow light. If both 7-27 crosses down 50, it's a red light = Sell.

The opposite is true for Long:
Close > MA 50
Green light if MA 7 crosses above MA 27, and stays above MA 50.

For a long term investor, weekly MA could also be used.

Don't you think it's a more "secure" way of investing?

Peter