A.I.M. Users Bulletin Board

[SFSecurity]

Hi Gang, Thanks for asking about NAVI, kraw, it caused me to look at things in a slightly different way.

One of the things I've questioned for a long time about Lichello's book is the table where the price goes from $10 down to $4 and back up twice a year for seven and a half years. I've never seen a position do that. Maybe, somewhere, there is one that does that but I've not found it.

While backtesting is limited as it is no predictor of the future, what it is useful for is showing what has not worked in the past. Remember the discussion about SPY and AIM versus Buy and Hope? Combining what happened there with the NAVI stuff and all the variations I tried with minimum trade size, PC percentage added when buying, percentage cash and looking at various time periods it is fairly clear to me that the most important key for relatively short term thinking, a couple three years - being 74, looooong term is not really an option - is entry point and then selecting an exit that makes sense and automating it with Good 'til Cancelled sale orders.

The two things to consider are how to select an entry point and how to select an exit point.

Selecting an exit point is easier once you know where you will enter the trade, what percentage profit are you aiming for. I'm guessing that a stepped approach is best, i.e., 1/3 at X, 1/3 at Y and 1/3 at Z or something similar to the way others protect their profits. This does not necessarily mean totally out of a position, just a decided upon portion. If I understand LD-AIM correctly, it helps with this. But it seems that looking at the range of past moves might be a good indicator as well. Not the dollar amount but this position typically goes up x percentage over y time, then apply it to the current market price of the position when selecting sale prices.

As to buying into a position, MACD crossover, Orcroft's method or some combination thereof, and, perhaps, some other metrics yet to be found, seems like the best approach.

The difficulty with this approach to getting into a trade is, what to do with your cash while you wait, twiddling your thumbs?

It seems that finding positions with almost no range in both bull and bear markets but that pays dividends is the best approach.

So, what does everyone think about all this?

Best,

Allen