I'm using an IRA account on FOLIOfn to invest using a system similar to the SMR's PSAR system. I check the Magic Formula stocks each week to see if any of them have a PSAR buy signal. If so, I purchase the stock using 5% of my portfolio's value. I plan to hold up to 20 stocks at one time. I also use the PSAR signal to sell just like the SMR PSAR system.
Say my portfolio is maxed out at 20 stocks and a new signal is generated. Is there any advantage to buying the new signal and dumping the worst performing of the 20 stocks? Are the odds better for the new signal or should it be about the same?