Assume further that it rose to $35 and back down to $21 before going back up to $40.. Am I correct in assuming that AIM would only have sold some thereby increasing cash reserve but since it never went below the PC, there would never have been a buy signal?
I guess I'll be anyone. In this case if you started with $20, AIM Classic would have created another buy because you should have your first sell on the run to $35. This raises the buy and sell ranges which in turn would allow you that next buy at $21 on the return trip. Although I believe you are correct in thinking that your portfolio control would not be adjusted on the sell, it still raises the bar for both buy & sell and that movement creates the next buying position above $20.
You will probably get many responses but I think as a beginner (FWIW) the worst thing you can do is to tweak the PC with no valid format (been there, done that). Let it change as the software dictates is my best advice.
FWIW, I think this group is the greatest and It only gets better as someone like you gets involved and starts asking very good questions. Like singing a song, we practice over and over again till the melody is instinct. I would suggest that you get both available software packages ASAP (Newport & PCA). Set up several watch lists through different directories (this is the training wheels). Tom showed me how to do it with Newport, and I have six running. Set one up for yourself, set one for someone else (my most active watch list is JZGalt), set one up for equities you wouldn't buy and monitor the data. Some folks talk down on AIM because they feel it to simple to work, well it does work but it is far from simple.
I just recently took of my training wheels (started in Jan.), but I have a ways to go before I know the whole song. Still trying to get in tune. (What's that melody in the back of my head? "What would you do if I sang you a song and dadadada dada got out of tune.., Oh I get by with a little help from my friends, Yea dada da from my friends") Is it Coker? First your hair & then your mind <ggg>.
Keith |
