Using PCA to Manage Actual Stock Holdings
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.
The mechanics of using the PCA software to actually manage stocks will be quite different than running simulations. First, all your initial set-up will be entered manually. You will create a Portfolio and then add holdings to it. Each portfolio holding consists of an equity and cash portion. Once you set up your initial holdings in the Portfolio Manager, subsequent trades in the equity are updated with a few click of the mouse. PCA will display the current trade advice as well as your next buy and sell target prices if you are in a hold pattern. You can choose to size the trades using the adjustments and the recalculate button.