Adam,
If I remember correctly, Ocroft only looks at the highest quality stocks he can find -- A++ rated (when I have looked, there have been fewer than 50 at several different times).
He then looks at these stocks on a chart and finds those that have a rather strong descent from a recent High. He does a "pretend" or "virtual" standard AIM buy at that High point and then checks it each month to see if AIM is directing further buys (those monthly checks could well be within the timeframe of the chart he is looking at).
For instance: today he found XYZ had a recent High in January 2012, he would make his "virtual" buy as of Jan and then check the chart in Feb, Mar, Apr, May, June, and July to see if the descent was sufficient to generate AIM Buy signals. If AIM did generate Buy signals, he would check again in Aug and every month thereafter until the AIM Buy signal stopped. In his "pretend" AIM, he would report all the Buy signals as having been obeyed.
But the first monthly check where there was no longer a Buy signal, he makes his decision about whether to enter this trade (XYZ may no longer be an A++ company or there may be more candidates that he prefers). He is not "committed" until this point. If he decides to enter, he then makes a trade that is the equivalent to ALL the AIM directed trades to that point in time. If the stock continues to go down from that point, he follows the same procedure again, if it goes up, he eventually will completely "Sell Out", NOT do AIM directed sells and not retain a "Core Position".
There is no likelyhood of the stock continuing to go up, as TooFuzzy suggested, because he is only looking at stocks that have come down from a recent high point -- he is looking back in time to find the candidates. He is not looking today to find stocks that are at a high today, he is looking today to find stocks that had a high in Jan or Feb and have since gone down.
Ocroft, please correct me if I have misunderstood your process.
Regards,
Bob
AI
