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Strategies & Market Trends : TATRADER GIZZARD STUDY--Stocks 12.00 or Less..... -- Ignore unavailable to you. Want to Upgrade?

To: Mike Sawyer who wrote (13519)	1/26/2000 3:27:00 AM
From: NW_Trader	Respond to of 59879

Mike: One last addendum before bed, so this may not be too coherent. The idea you are espousing was written up in TASC or AAII Journal about 2 years ago with the terminology of "zero cost averaging". A simple example is you buy 1000 shares at 5 and sell 500 at 10, the remaining 500 now have a cost basis of 0 (ignoring commissions and of course, the IRS won't buy this if you try and report this way - lol). But from the stand point of your account balance, it works. If you are buying good long term stocks - you still profit in the future growth, but can sleep well at nite if you use the the psychological gambit that those shares cost you nothing, so you don't have anything to lose. The same can be done with selling different portions at different prices, or (as I have done for some time with SBUX LU BA and a few other blue chips) buying and selling a trading position, while maintaining a core position. A good way to take money out of trading but keep in in the market where it can grow. Confession: despite knowing this, I have a very hard time applying it to a trading stock - VRTL a classic example for me too. If I had kept 1/3 of my position bought at 1 7/8 and sold at 3 5/16 the next day or so, I'd have caught the first spike to 14 and really had free shares. My difficulty is regarding a trading stock like VRTL when it is under 5 and doubles as an investment. I've seen doubles, triples and 5+ baggers retrace their steps and the long term holders who kept holding for that sure 10 bagger got zip. ABTX, RADA, GRNO, and some others come quickly to mind. Peace and Justice --- Patrick