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Strategies & Market Trends : Investing for the Long Run

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To: loantech who wrote (2)6/27/2007 7:36:20 AM
From: tyc:>  Read Replies (1) of 68
 
>>just not those inverse ratio charts. <G>

Hi Tom, Welcome to my new thread or blog! There's just the two of us and it will probably stay that way. It certainly won't be very interesting, but the stated theme of the thread seems to mirror my investing aims, and putting it in writing is a good way to develop thinking.

I hope what you really mean is rather, not just, those ratio charts !

I have developed a system of trading assisted by a Qbasic computer program that i wrote myself. It requires me to establish an expected trading range for each stock. By the time it reaches the TOP of the trading range I'm all OUT of the stock. By the time we reach the bottom of the range we have a full exposure.... that we can live with.

The trading range is divided into increments or sub-targets. As each target is reached on the upside a sale is made that will yield the dollars required to buy a predetermined number of my S&P500 index shares. Conversely, on the downside when a subtarget is crossed, a purchase is made costing a like number of my S&P500 index shares.

In that way I harvest the profit offered by fluctuations in the price of the stock, something a buy and hold strategy doesn't do. Every buy/sell is made with the intention of reversing it profitably and at a predetermined GP margin. So long as the stock is trading withing my trading range, I look forward to both buying and selling it !

My next posting will use one of my charts to illustrate a trading range and increments.
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