Why Not Sell When A Stock Falls Out of the Buy Zone?

The Brockmann Method states that you should buy the stocks in the Buy Zone (top 10 ranked stocks) and then sell only when the stock passes into the Avoid Zone (26+ ranked stocks). Between the Buy Zone and the Avoid Zone is the Don’t Buy More Zone. This is a kind of buffer or damper on the natural volatility in the changes in Zones from one day to the next.

As it stands, in a typical year the Brockmann Method might require ~ 25-30 trades. Roughly once every two weeks or so. Manageable for most retail investors.

Besides, if users were to sell a stock whenever it falls outside of the Buy Zone, the frequency of trading greatly increases with no appreciable gain in results. So, the Don’t Buy More Zone offers a pause space that simplifies the user experience.

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