The Math Behind PCA
The Position Cost Averagingtm theory, based on mathematics, captures stock volatility and uses it to the investor’s advantage. It signals the action by giving the exact price, and number of shares, to buy or sell creating systematic profits for an investor.
Small gains are methodically taken as prices are rising and additional shares are accumulated when prices are low. The purpose of this incremental adjustment in the amount of stock holdings, is to determine the level of equity exposure based on the price action of the equity itself. (Truly Revolutionary)
The method can best be described as trading around a “core position” in a stock.
The sine wave graph shows how the PCA system buys and sells incrementally. As the stock rises, profits are locked-in, and as the price dips, additional shares are accumulated.
The flexibility of the PCA system allows the user to optimize the trade levels to suit any particular stock or ETF.
What makes the PCA system revolutionary is the compounding effect over time that adjusts the size of the trades to maximize profits as the price fluctuates. As the wave oscillates, trades are executed around the core position.
The frequency of the oscillation over time and the magnitude of the deviation will determine the rate of return.
This method of strategically deploying your cash into a stock and adjusting your exposure is coupled with a compounding formula to produce extraordinary investing profits on individual stocks.
Programmed to buy low and sell high, the Position Cost Averaging formulas were designed to perform over a long period of time and over many market cycles. The system is designed to be a “fixed cost portfolio” and keeps a perfect balance between the cash side and the equity side of an investment. The compounding effect of this strategy, over time, is unbelievable.
The PCA System gives very specific signals on how much stock to buy or sell at any given time. You can determine exactly where your next buy and sell levels are by simply entering prices into the system.
This system is essential for determining at which points it is prudent to “average down”, and at what levels it is wise to “take some profits” with the goal of systematically increasing the portfolio value.
Stock selection plays a crucial role in the performance of a Position Cost Averaging system, and is one of the few subjective criteria in a system designed to be completely objective.
Position Cost Averaging is far superior to Dollar Cost Averaging.
Dollar Cost Averaging is simply hoping the market lows occurred at the time your “regularly scheduled” investment was placed, (Not Likely), and you never get to “lock-in” profits.
Position Cost Averaging generates automatic investment advice that reduces your cost per share at every opportunity, and lets you know when profits are there for the taking.
