HCT - In A Nutshell - KJ, page-503

But if you bought in at say 16c but hold as price drops as you believe in long term growth then sell at say 12c. There is a 25% capital loss to offset against gains on other stocks sold. You then buy back in at a date not far of the sale date at say 12.5c as you still believe in the company and growth potential. Eventually when the stock goes up and you sell you will have a capital gain, but in the current year you get to use the loss to reduce tax on the current year.
Think it is called washing. Very effective, but if caught doing it well the tax man is not so understanding.