The PCA for Windows Online Manual

How to Use and Maniplulate the Trading Advice

The Trade Advice box displays the suggested advice at any given time. This advice can vary considerably depending on the combination of variables that are entered in the system.

The trade advice box shows if the advice is to Buy, Sell, or Hold at the current price. If a Buy or Sell signal is given, the number of shares to be traded at the current price is displayed along with the total amount of the trade. Buy and Sell orders will highlight in either red or green.

Notice that the number of shares is not rounded off, and is carried to 2 digits in the display. The reason for this is apparent when a high dollar stock is in the system, which would cause the amount of the transaction to seem erroneous when the number of shares was multiplied by the price.

When managing actual stocks in PCA, you will want to round off the number of shares traded and can even choose to trade in round lots if desired.

The Trade Advice is meant to be a guide and is not set in stone. You can choose to ignore the advice, alter it by changing some options, or round it off for convenience.

The advice is a function of the settings and values that are plugged into the Control Panel at the time, and can be edited by either changing the settings or even editing the actual trades.

PCA was programmed so that the trade advice is automatically executed in the system when you are running simulations and back-testing.

The system was designed to perform optimally with the advice given. Any deviation from the advice will affect the return of the portfolio, and can reduce or increase the current return.

Obviously, you will not be able to purchase or sell fractional stock shares, so you should try to get as close to the advice as possible with your trades. It is very common to round off trades to the closest 50 shares, but be careful those 50 shares aren't too big a portion of your portfolio.

You can choose to enter 50 shares as a Minimum amount to trade, and it will over-ride the Minimum in dollars.

Use this feature cautiously, as it will greatly affect the trades and advice.

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It is very important that you understand exactly what is involved if you decide to manage actual real-life, hard earned out-of-pocket money in the PCA system.

Above all, the strategy has to make sense to you and you have to be willing to let go of your emotions. The system is impartial and completely objective. It uses the numbers plugged in to generate the trade advice, and does not take any news, views, or hype into consideration. It is very difficult to separate out the emotional side of investing, and concentrate on strategy using a mechanical method.

If you use actual stock holdings in the system, you must realize that you will be asked to buy more of that stock when things look really bad, and everyone else is selling. Conversely, when it seems that your stock is the darling of Wall Street and it's going to the moon, you must be willing to lock in some profits.

It an absolutely contrarian model and goes against what your gut feeling will be telling you to do. Please realize that it is very hard to bite the bullet and make the trade when everything you hear seems to the contrary.

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