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Adam

02/19/10 10:52 PM

#31433 RE: Conrad #31432

Hi Conrad, I also disagree that the residual is necessarily a flaw. First in practice the residual by itself should not cause a trade advice unless the min buy is set very small.

Secondly it's ok to break a buy into multiple trades-- it's a method recommended by Cramer to lower the risk. You pay slightly higher trading costs but you benefit by lowering risk.

Thirdly when I've noticed a stock severely dropping, I have purposely put in a residual buy by only buying the minimum or close to it. In other words if AIM or LD-AIM tells me to buy 10,000 worth of stock and my min is 2000 I may just buy 2000 worth, wait a month or more and buy another 2000 if the residual is still there. This also spreads out the risk and is a way of conserving cash.

The point is a residual is a feature but not necessarily a flaw.

Adam