BECOME A GREEN LIGHT BUYER

by Dr. Bart DiLiddo Friday, 08/21/2009
Two weeks ago I wrote an essay called, "One Day at a Time." The point was that you don't have to predict the stock market to make good money in it. In fact, having a preconceived notion of what stock prices are going to do could be very harmful to your wealth.

Then I began to wonder what would happen if I bought the top stock, ranked by VST, every time a Green light appeared in the Price column of the Color Guard. VectorVest preaches that we should buy rising stocks in rising markets. So I should make money. I ran some tests.

The first test I ran started on March 17, 2009, when a Green light first appeared in the Price column of the Color Guard from the March 9th bottom. I bought $1,000 worth of Buckle Inc., BKE, the top VST stock as shown in Stock Viewer, at the Open on the 18th. I decided that I would sell it on an 'S' Rec or if it went up 100%. Another Green light appeared in the Price column of the Color Guard on the 18th, so I bought $1,000 worth of Aeropostale, ARO, at the Open, on the 19th. I repeated this process of looking for a Green light in the Price column of the Color Guard and buying the top VST stock, until yesterday.

During this time, I made 44 purchases of $1,000 each and closed 19 positions with four winners and 15 losers. The average winning trade made $706 and the average losing trade lost $195. The current portfolio holds 25 positions with 17 winners and 8 losers. The portfolio is worth $31,165 from an investment of $28,013, for a net gain of $3,071, or 11.25%.

While this performance is not overwhelming, one must remember that the money was invested over a period of time, not all at once. This means that there was far less risk during the early stages of building the portfolio. In another test in which I bought 10 stocks on the March 17, 2009 Green light, I used a 50% gain or 20% loss to exit positions and replenished positions only upon receiving a Green light produced a gain of 49.74%. Other tests going back to March 21, 2003 also showed that buying top VST stocks when a Green light appears in the Price column of the Color Guard is a viable strategy.

The thing I like the most about this technique is that it's so easy to do. Simply look at the Color Guard. See a Green light in the Price column and buy a top VST stock you don't already own. Try it. You may wish to Become A Green Light Buyer.

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Tags:

General | Investment Strategies | The Color Guard

Comments

8/27/2009 4:48:18 AM



Obviously result is going to look positive because you picked a time period during which market has moved up. Provide us result of the test if you had started this around September 10, 2008 and ended on March 9, 2009.

Yogesh Patel us

8/31/2009 9:47:39 PM

I wonder how long you have used vector vest.

About a month ago KIRK CKSW GMCR were among the favorite stock on their website, unfortunately relying on this belief I bough the stocks, Gosh you know what has happened----down, down we go, this stocks are trading 30% below what I paid.
Be Forewarned

kim jos us

9/8/2009 6:13:26 AM

I've been using the VectorVest system since May with excellent results. The key to my success is that I watched the training videos in the VectorVest University and I read the VectorVest views EVERYDAY. This is very important. When you give the program 100% effort you will get very good results.

Bob us

9/22/2009 12:52:45 PM

you only loose big if you dont use stops.

d us

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