A very important aspect of PCA investing is setting the minimum trade amounts for executions. These minimums can be set in dollars, shares, or both. In the new PCA system, the minimums are also split between buy and sell. The concept of the "Minimum Market Order" is very simple  -  no trade signal will be issued unless it will occur at a value higher than the minimum specified by the user. A good rule of thumb is that you would never want to trade less than 5% of your portfolio value. This helps to keep the cost of commissions as low as possible and prevents trading too frequently. PCA will use whichever minimum is set higher in the system, shares or dollars, as the absolute floor, below which no trades are signaled.

A powerful way to take advantage of the "Minimum Market Order", is to specify a minimum number of shares to trade. This can really turbocharge the results, however extreme caution should be used when specifying a minimum in shares. If you start with 300 shares of stock, it probably would be unreasonable to set a minimum of 100 shares. It would take quite an exceptional percentage move in the stock to signal a trade that would be equal to 1/3 of your stock value.

Using a minimum market order in dollars is the best way to get a feel for the range of your market order. With today's low trading commissions, it it fairly reasonable to use $500 as the minimum in dollars, though this will equate to a commission of 2 1/2% of the trade. In larger portfolios, a $1000 minimum may be preferable to really make the cost of commissions inconsequential.

A powerful way to utilize the flexibility of the Minimum Trade settings is to adjust them in accordance with the action of a particular stock at the time. Say that a stock is having a strong run-up that seems to be gaining momentum due to a good earnings report or some bullish news. If you had your PCA set to trade a minimum of 50 shares and it was already signaling a sell order, you could choose to increase the minimum to 100 shares. this would hold off selling until the price is substantially higher. Another interesting way to use these settings is to split the minimums between buy and sell. If you had a stock that always seemed to be rising, you could set the minimum sell at 100 shares, allowing increased participation, but set the minimum buy at 50 shares so that you would be buying on any meaningful pullback. The Minimum Market Order settings are a very integral component of PCA, and the best way to evaluate the consequences of them is to do some testing with a stock you are familiar with. Varying the settings and observing the results will help you to better understand how the minimums affect the trading of the system.