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Non-Tech : QQQ - Nasdaq 100 Trust
QQQ 621.08-0.1%Nov 12 4:00 PM EST
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To: beckya who wrote (337)7/27/2000 8:53:20 AM
From: Hermann Ragaller  Read Replies (1) of 840
 
Currently I am trying this very simple tactic:

I am buying all the way down the current short term down move with a step of 2 points. Therefore I bought / will buy at 96, 94, 92, 90 and so on until either the trend reverses or I run out of money. Every chunk is the same size, which I set to 60 shares (depends on the amount of capital available for this game). When the trend reverses I start selling the same chunks as soon as the price is 5 points above my last buy.

I still let some judgement go into this. At the extremes of a short term trend (~5-15 days) I might sell more or by more than the usual chunks. I'm convinced that a purely mechanical system will never work over the long term.

I am pretty sure that my simple system will not work either, but at least it should help me to to avoid the emotional pitfalls (buying when stocks jump and selling in frustration when they fall).

I tried a similar approach in late summer of 1999 and it worked quite well - until the big uptrend started in November. I had sold the last shares at about 120 cashing in a few points just to see the price rising to over 200 in the following months.

This is really the problem with those mechanical approaches: you will either run out of money during the down trend or out of stock during the uptrend. They only work reasonably well when there is no clear trend.

Regards,
HR
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