Core Position Trading Buy Low Sell High Stock Trading ETF Trading | Automatic Investment Management (AIM) vs. Technical Analysis for Trading

Many of the posters to a popular Precious Metals (PM) discussion forum^[1] claim to be into the Precious Metals for the long haul, but in actuality they have a Technical Analysis (TA) bias or concern.  By this, I mean they are extremely concerned with day-to-day price movements, trumpeting or bewailing every $1.00 or $2.00 per ounce movement in the Price of Gold (POG), for example.  There are endless debates about resistance and support levels, trend lines, various technical indicators, etc.  Furthermore, there are endless ruminations as to when to "bail" if the price decreases, and when to "cash in" if the price increases substantially.

I've been waiting for the trip "to the moon" (precious metals pricewise) for years.  It's always just around the corner.  But I am in for the long haul.  My objective is to increase both the ounces and inflation adjusted fiat currency (US$ or whatever) under my control by judicious buying and selling from time to time.  Undoubtedly technical analysis has its uses, especially for short term trading, and especially in highly leveraged markets, such as futures and options.  But it may not be suitable for most people in a long term accumulation mode.  Also, simple "buy and hold (buy and hope)" or "buy when some spare cash" methods have their problems, as people who bought gold at $600 to $800 per ounce some years ago can tell you.  But now, there is an effective alternative to both fundamental analysis and technical analysis.

The original version of this article was addressed to "gold-bugs".  This revised version is applicable to anyone holding stocks, exchange traded funds (ETFs), or mutual funds of any kind, not just to those having only some sort of position in precious metals bullion, bullion coins, and/or related precious metals stocks and mutual funds.

All or part of your present holdings can be considered as your "Core Position".  If you trade your Core Position properly, you can eventually greatly increase your position in both holdings and cash, and eventually reduce your average cost per share to LESS than zero.  And, Core Position Trading does NOT require the prices of precious metals or your precious metals stocks or other stocks to go "to the moon".  (Of course, if the PMs and PM stocks did go "to the moon", that would be lovely, because it would wipe out a lot of ruling class apologists, quislings, and assorted other smug a*ho*s.)

Anyway, this alternative method of trading is called "Core Position Trading™" ( About Core Position Trading).

I strongly recommend you get Robert Lichello's How to Make $1,000,000 in the Stock Market Automatically!   Don't let the "hokey" title put you off.  The book was first published in 1977 and is now in its Fourth Revised Edition (December 2001).  It's available on Amazon.com for about $8.00.  [2002-05-29]  AIM is a very effective method of trading your Core Position.  Good News -- Lichello's book was unavailable for awhile, but a Fourth Revised Edition is now available.    [2002-05-29].

There has been speculation, mostly involving wailing and moaning, on that PM forum mentioned above, about how the "big boys" (TPTB) force the gold price down so they can buy on dips, then let it go up and sell on the rallies.  You can follow that lead.  The question is, how much do you buy at what price(s) on a dip, and how much do you sell at what price(s) on a rally?  Lichello's AIM method answers that question.  And YOU ARE STILL POSITIONED if/when the gold price hits $2500 (whatever) per ounce.  But the price doesn't need to go "to the moon"; as long as prices thrash around, at whatever general level, you can eventually make out.  (You do need SOME price volatility, like that seen recently.  [Spring 2001])

A general discussion of Core Position Trading can be found starting at  http://www.bean-d.com/cpt/.
A description of a software program that calculates the amounts to buy and sell at various prices, following the Lichello "AIM" methodology, can be found at  http://www.bean-d.com/cpt/aim-stock-etf-transaction-calculator.php.

If you are interested in "Buying Low and Selling High", without trying to predict prices, you need to look into Core Postion Trading™ ( About Core Position Trading).

[1]  The above is a revised copy of a posting to that forum sometime back in 2000 or 2001.  I am not mentioning the name of the forum or posting its URL since the forum owner "banned" me for self-promotion, including links to some of my pages such as this.

Tags:   Automatic Investment Management (AIM),  buy and hold,  buy and hope,  buy low sell high,  Core Position Trading (CPT),  fiat money,  fundamental analysis,  gold,  platinum,  precious metals,  Robert Lichello,  silver,  support and resistance,  technical analysis,  trend lines, 

Core Position Trading
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Core Position Trading

Core Position Trading Overview
Core Position Trading Alternative to Technical Analysis

Automatic Investment Management (AIM) Basics

Automatic Investment Management (AIM) Basics
Volatility is Your Friend™
Fixed Commissions Effects and AIM
AIM Anomalies
SAFE and Quantity to Sell at Various Prices (chart)
SAFE, PoCo, Prices, and Minimum Orders (charts)

AIM Stock & ETF Trading Transaction Calculator

AIM Stock & ETF Transaction Calculator Description
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AIM Transaction Calculator User Document
AIM Stock & ETF Trading Account Setup
Price Move Required for AIM Stock or ETF Transaction
Commission Effects on Transaction Prices and Amounts
AIM Transaction Calculator Price Range Calculation
Price Range Calculation for Desired Percent Price Move
VEALIES - Adjusting AIM Account Portfolio Control
Indexing Portfolio Control for Inflation (Cost of Living)

AIM Stock & ETF Position Overview Spreadsheet
Position Overview Spreadsheet User Document (old)
Position Overview Spreadsheet User Document (new)

Lichello's 'By the Book' Trade History Spreadsheets

AIM 'By the Book' Trade Spreadsheets Description
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AIM e-gold Trading Transaction Calculator

Because of actions by the increasingly out-of-control fascist U.S. Government, the AIM e-gold transaction software is no longer usable.  Regardless, you may be interested in some of the information about gold, money, and government fiat currency debasement that robs you of capital and purchasing power on those pages linked to from this section, especially in the User Document.

AIM e-gold Trading Transaction Calculator Description
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AIM e-gold Transaction Calculator User Document

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