Hi Grabber,
I fully understand LD-AIM and I spent quite a bit of time playing with your excellent Excel sheet. It is a really great concept and does not change the fundamentals of AIM at all.
In practice, for all my AIM accounts, I have an additional column that has the virtual shares. Most of the time, it is ZERO (classic AIM). Sometimes it is the same amount of real shares, and sometimes a bit more. AIM is calling the shots based on real+virtual.
But I kinda see why you thought I am not using LD-AIM in my program. I think using the word 'leverage' is what may have given that impression.
Here is my thinking:
Say one has 100,000$ and wanted to start a new AIM program with standard settings, with 20% cash reserves, exactly what Lichello recommended. The only problem is that s/he was not comfortable deploying 80,000$ in one shot.
And then Grabber introduced them to LD-AIM, where he convinced them to deploy only $40,000, but thereafter executing buy/sell signals as if they had committed all of the $80,000 into equity.
Now they might end up selling out completely after 4-5 sell signals, or they might stop buying (after a sequence of buys) even though there is plenty of cash in the bank; they are not the ones calling the buys/sells. Another AIM with twice the initial equity is.
For my back-testing software, I like to be able to answer the following simple question: If I had deployed only half (or whatever factor) of the assets that are meant to be allocated to equity into real equity (i.e. 40% instead of 80%) and kept the rest in cash reserves (60% instead of 20%), would I better off in the end? I am not looking to diversify or increase the number of my AIM programs, but rather to achieve what an 80/20 classic AIM would but with more cash, hence less risk.
How is the above not LD-AIM?
