DDCA PPTM

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What, you may be asking, is PPTM??? It's my name for a method that I did not invent I am sure. But how I use it might be a different. Its simple to do. You buy a stock with 1/2 of a set amount. I recommend $4000 to $6000 total for each stock since you will be using some low priced and maybe risky stocks. You could even invest less, like a total of $2000 but remember that commissions can put a dent in your take. Keep commissions as low as possible no matter what!
Put 1/2 in the stock and the other 1/2 in cash. Now, when the stock goes up 20% you will sell a portion of the stock. On the other hand if it goes down 20% you buy more. 20% is an arbitrary number but it seems to work best for low priced issues of high volatility that sell between $1 and $5. If the price is over $5 and up to $10 then 15% would be better and over $10 perhaps 10% is a good number.

This method uses DDCA (or you could use AIM) and buys and sells at predetermined percentage levels. Nothing new here, AIM users have done all this before. I propose using this method on very high beta, low priced stocks gleaned from a stock screening service such as that available at Yahoo.com. I like the stock screener at Yahoo because it allows me to set the beta level as a criteria. Other screeners may offer this as well but I like the yahoo screener just fine.
The stocks I like trade between $1 and $5. I wouldn't turn down higher priced issues or lower priced ones, but I feel more comfortable with the $1-$5 range and even closer to $1. Here is what I look for:

 Share Price: $1 to $5
Avg Share Volume: 50K per day (min.)
 Beta (Volatility): 3 (min.)

That's all I set in the screener. You could set more criteria if you like but you would get fewer hits as the filters weed out more stocks. I get quite a few candidates to chose from and then I look at them by using charts. I look for the type of patterns that would lend itself to PPTM.
Like CHRD below. This one is typical of what I would want as a candidate. Its going sideways, it's rolling. It has a good range of price movement or did anyway and I 'd bet it will in the near future. It is selling near $1.00. Though this is not an absolute it's what I personally would like. After you have decided to buy a stock you needn't look at a chart again until you decided to get out of the stock entirely and maybe not even then. It's up to you. You can ride it out for years if you like. Switch it to reg DDCA or AIM or just hold on till it's passed on to your children. Its up to you.

		CHRD went from $1.05 to 1.02. Down 2.9% but by using PPTM at the end of the chart (6 months) you would have been ahead 31%! CHRD is very typical of the issues you might encounter in your scans. So, you start out buying CHRD at 1.05 and right away put in a GTC order to sell at 20% above $1.05 ($1.05 x 1.2 = $1.26) and a GTC order to buy at 20% below $1.05 ($1.05 x 0.80 = $0.84). When one gets hit cancel the other. If you didn't know, GTC is "Good Till Canceled" It's nice because you can ignore it till it's executed. Your GTC order is determined (that is how many shares to buy or sell) by the recommended amount from DDCA (or AIM). With DDCA you would sell 20% of your total portfolio value or buy 20% of your total portfolio which ever is called for. So in DDCA set the min% to zero and the buy and sell to a factor of 1. I have not tried AIM so you would have to experiment but I personally would go by the book.
With CHRD it did not take long. 8 days or so to get the first sell. Now the new price will be the basis for two new GTC orders at 20% above and 20% below that sell point. Continue to do this until you are happy with the results. I propose 6 months or so then look for another issue. Of course you would probably want to close it out at a profit! Look to sell out when the Stochastic is in it's sell zone! This chart is 6 months to give you an idea of the period. There is nothing magic about 6 months except some of these stocks might be risky and so I would personally like to take the money and run and look for another issue.

Notice the spikes on this sample. This is the beauty of the method. The range of the price from Mar 17th to Mar 24th was approx 67%! Having limit orders in allows you to often benefit from these spikes. Lets say your last transaction was at .80 and you set your GTC at .64 to buy. It most likely would have been hit on the Mar 17th spike down. If it did, now your orders will be .77 to sell and .51 to buy. .77 would have been the next level to be hit. Then from that .92 the next sell. Easy! It opened there so you would have most likely been hit. These spikes may have been quite fast in nature so if you were not using GTC orders you may have missed the opportunity to capitalize on these events.

Here are the results of a few I have run the numbers on. These yields were at the end of 6 months which is an arbitrary period. Like I said try to get out when the Stochastic is in the sell zone. If you do you should do better than these examples:

These are good gains for the short time invested. Of course these are riskier stocks than some and this is past performance but it does point out the potential gains to be derived from low priced issues. There are no hard fast rules for how long you hold onto an issue, how much you invest or what percentage to use for your trigger. At my settings I know you wont have to wait long for action. Experiment with the setttings in DDCA or AIM by doing some back testing and see what the best settings would be. This is all new so it should get better over time.

If you run out of shares during a "run" you might look for another issue. If you run out of money don't put more money into it. Wait for it to come back with AIM (It might not!) Or wait for a sell signal with DDCA by selling when the Stochastic gives a sell signal this takes you away from PPTM and goes straight into SRB. It is possible to redeem a "Deep Diver" with DDCA. Write it off if it goes south for good but don't keep throwing good money after bad. This can get you into trouble fast. If you do a little homework you may lessen your risk by choosing stocks that have better fundamentals. Don't buy stocks that are cheap for a good reason. Here, diversification is very important.

I offer this trading method to anyone who wants to use it at their own risk!. Nor am I out to make money from this project. I also encourage others to add there input and strive to improve it and make this a boon to mankind as I believe it will. If for some reason someone wants to capitalize from it by selling it I would demand a cut ! #:)