Thanks Don,
I have been doing same (Buying day after Selling). Only difference is that I have been using a Limit order for the last position to try and avoid not having enough cash in the case where the prospective position closes higher than expected with a MOC order.
I am also interested in how Gary handles this situation but I suspect he solves by being at the computer at market close - something I have no wish to do.
Great discussion gents.
Besides the methods discussed above, there are three other methods I’ve used to sell and buy on the ‘same’ day for the last position in a portfolio.
The first and second for the Public Portfolios and the third for my other non-public facing portfolios on the US and ASX markets:
- using CFDs, as Wakefield has done - set the Buy of the last position as a MoC order for the CFD of the stock. You will pay interest on the whole position, which will be greater than the interest received for the cash released from the Exit.
- (this one requires that you have multiple USD sub-accounts) - transfer cash from one subaccount to the other to cover the Cash Buffer. A juggle every now and then.
- Using a MoO on the trading day after the Buy MoC order should have been executed (2nd day after the Signal bar).
The idea behind option 3 is that the following day open is thereabouts to the prev day’s close. Mostly the open is slightly higher or lower (not the same) than the prev day’s close but over a number of Buy signals it averages out.
I have done option 3 on occasion in the PP’s when there was no cash to transfer between USD sub-accounts.
If the 3rd option appeals compared to holding a Cash Buffer, you write it into your Investment Plan, and execute consistently in this way for the last position, you will still be holding true to rules-based execution.