Position Cost Averagingtm
is a money-management investing technique that incrementally adjusts exposure to a stock holding based on the price action of that stock. It relies strictly on mathematic calculations and does not take any subjective matter, like news or company fundamentals, into account when generating trade advice. The strategy considers a "portfolio holding" to have two components at all times. The equity portion and the cash portion. Over time, both components are fluid, and will constantly change based on trades executed. As a stock rises, incremental shares are sold and directed to the cash reserve. On significant price dips, the cash reserve is strategically deployed back into that same stock. It is programmed to buy-low and sell-high, systematically trading around a core holding in an equity.
The system contains a compounding algorithm that is designed to grow the total value of the portfolio holding over time as trades are executed on both the buy and sell side. This "portfolio control" is a value, automatically set along with the initial parameters, that only increases. This serves to magnify the size of the trades over time and results in the portfolio growing in both cash and stock. The idea is to find a stock that has a high degree of percentage fluctuation, both up and down, and use these changes to dynamically capture the volatility, trading systematically on the up's and down's.
The PCA System consistently locks-in small gains as prices are rising and accumulates additional positions when prices are low. The cash reserve is slowly deployed in a manner that gives the most equity exposure at the cycle bottom and accumulates a large percentage in the cash reserve at stock price peaks. Please note that under testing conditions, PCA buys into a stock at a slightly faster rate than it sells. Many of the internal controls can be adjusted and optimized by the user, who has complete control over the exact buy and sell points.
The PCA System software itself acts as a personal trade advisor, generating automatic buy and sell signals through use of mathematic formulas. It features portfolio management capabilities as well as the ability to back-test any stock with a few clicks of the mouse. The PCA System is designed to more effectively manage stocks with a systematic and disciplined method. Click Here to see what makes the PCA System so much different than any other trading strategy.
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