Frequently Asked Questions

General Questions
I am just curious how big money one can manage using your system.

Q: I am just curious how big money one can manage using your system.

For example, Let's assume that I have 1 million dollars.

Can I follow your MDM (Market Direction Model) signal without perturbing the market ? 1 million might be ok. Then how about 100 million. Can I simply buy ETFs in single day following your signals ? What is the threshold level ?

And if I am buying individual stocks, then can I follow your suggestions with 1 million? 100 million ?

In other words, what is the sort of the upper limit of money with which one can follow your system easily ?


A: You can follow the MDM signal without affecting the market even if you had hundreds of millions, or even billions. Markets are made in ETFs differently than stocks, thus you can buy a huge number of shares without affecting the price. ETFs will print shares to accommodate demand, as arbitrage is utilized, so you'll notice the price stays in line:

For individual stocks, we have a rule where we own no more than 10% of the 50-day average daily volume of a stock, and usually it is no more than 5%, simply because stocks have slippage, especially during weak moments in the market when everyone is trying to get out. So in terms of the simulated portfolio, if a stock averaged 1 million shares a day, we would hold no more than 50,000 to 100,000 shares of that stock.

Published: Apr 22 2011, Modified: Aug 27 2012