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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: LemonHead who wrote (11297)	5/30/2000 9:08:00 AM
From: rgammon	Respond to of 18928

Keith, The issue with modelling the 'half way to the wall' situation is that in reality, we DON'T know where the bottom is. The model ALWAYS shows us where the stock makes a turn and heads back up. By buying only half as much as directed, you may fall into a trap of a short term dip that would trigger only 1 trade, and you only bought 50% of what you should have. If the fall IS extended, i.e. 50%-60% fall in price, then your suggestion works (buys at 50% of directed for the first 50% of your cash, 100% of directed for last 50% of your cash). While we have quite a number of stocks that have recently had 60+% price declines, this is not the normal trading pattern. So, I favor the use of 'half way to the wall' as a tool of last resort. If a buy consumes more than 50% of available cash (i.e. not a min trade), then limit the buy to 50% of available cash. If the stock continues to fall, continue the use of this method. Robert - Mr AIM Aggressive

To: LemonHead who wrote (11297)	5/30/2000 10:44:00 AM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hi Keith, Something else I was going to bring up in LV was that I only trade x00 share lots (to keep my life simple at tax time). Along with this I always "round down" on either buying or selling. In other words, if I'm getting a Sell signal for 175 Shares of my favorite equity, I just sell 100. This goes for buying as well. A buy signal for 480 shares gets only 400. Then I wait until the next "period" before trading again. This isn't exactly on the topic of "half way to the wall", but you can see how it helps conserve shares when selling and conserve cash when buying. It also then makes my tax accounting simpler. Best regards, Tom