Learn forex trading online – No stock would be bought, in fact, unless the market average fell to the median, at which time the stock percentage would be brought up to 50 percent all at once.

Apparently the original purpose of this rule was to allow a wide swing in stock prices to run for some time before the investor started chasing it. This would have been a good idea in the 1929-32 crash, when stocks bought even at levels long after the top turned out to have been purchased too soon. But rigorous application of the rule would prevent the investor from taking advantage of any intermediate-term fluctuations in prices. The 1957 market break, for example, carried the Dow-Jones Industrials down less than 20 percent, but the low point represented an excellent opportunity to buy stocks. A serious weakness of the halfway rule is that it tends to immobilize the account for long periods. It is generally agreed that the halfway rule is of little or no value over a period of time, and does at least as much harm to profits as it does good.

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[tags]Forex Trading Strategy[/tags]