Replies to post #33757 on A.I.M. Users Bulletin Board (AIMUSERS)

[Adam]

Hi Clive,

"As to OCroft's idea. As I understand it, you monitor the ...

If in April the PC - SV indicated +$1000, and then that increased to $1100 in May, but then declined back to $1000 in June, then that reversal in the increasing amount is the time to make the actual trade (in this case buy $1000)"

This is similar to the idea of waiting till the stock value goes above some moving average before buying. Of course there is nothing to prevent a stock from moving up and then continuing down. In fact this happens all the time as stocks generally oscillate even as they move up or down.

Also, while these methods help with cash depletion they don't solve the problem of a stock that looses most of its value and ends up trading at say one third of the starting value. The only real solution to this is with a stop loss.

Adam