Frequently Asked Questions

Dr K Market Direction Model
The model just switched from a sell to a buy signal. If I were to switch into cash rather than go long and the market took off to the long side, would I ever get another buy signal?

Q: The model just switched from a sell to a buy signal. If I were to switch into cash rather than go long and the market took off to the long side, would I ever get another buy signal? I would think that I need to go long here or I may be stuck in cash until the next signal switch.

 

A: The model would not give a second buy signal, just as it would not give a second sell or a second cash signal. That said, you could try pyramiding into your position by buying a smaller than normal starter position, then add to it as the market proves itself on a price basis.

That way, you participate in at least some profit potential if the signal is true, while losing less if the signal is false.


Published: Oct 5 2011