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Strategies & Market Trends : the Women of SI -- Ignore unavailable to you. Want to Upgrade?

To: Rainy_Day_Woman who wrote (695)	3/24/1999 3:42:00 PM
From: OldAIMGuy	Read Replies (2) \| Respond to of 1691

Hi Ms Foxy, With Newport, we set the minimums we wish to trade. I usually use a minimum of 100 shares or 5% of my position, whichever is larger. I trade round lots on stocks, but with mutual funds, it doesn't matter. Then, I place "good 'til cancelled" orders for the buy and sell sides for minimum size orders and then go play hookie! The trades happen when the price gets there. Very low maintenance! There's a "what if" window in Newport that lets you type in a price beyond that at which you will trigger your minimum order. It calculates how many shares you should trade at that price. So, let's say you are using 100 share minimums and own 1000 shares at $20/sh. The program would tell you to put in a "gtc" order to sell 100 shares of your holding at about $25. But if you awakened one morning to find your favorite stock up tremendously because of a buy-out offer, how would you know how much more to sell? The "what if" window is where you'd go. The first 100 went at the limit price, but with the price now at $32 :-), how much more should we sell? Newport will tell us to enter an order to sell an additional 200 shares at $32. It works the same on the Buy side. For TA traders, this looks fishy at first. Why sell while the price is rising? Why buy when the price is falling? AIM/Newport is a "reactive" program, not a "predictive" one. It reacts to what's just happened rather than attempting to predict the future. AIM/Newport depends on 20/20 hindsight rather than a 50/50 guess about the future! :-) Best regards, Tom