Hi Clive, between the Tennis Games of the First Set on Wimbledon I produced some Vortex Data Sets to have a closer look at:
For 50-50 initial stock/cash ($10,000 stock value, $10,000 cash), 10% SAFE, 10% min trade size and assuming a stock was 100 and declined 20% each week for four weeks down to 40.96, a weekly updated AIM would have exhausted all cash reserves ($10,578 of total buys). The same settings, but reviewed at the 40.96 price as the first update would indicate $5500 of additional stock be bought and still leave $4500 in cash reserves should the price continue further down. (There would be a residual buy of around $2200 sitting there waiting to be traded even if the price moved nowhere).
just to see how Vortex reacts to this. I have used for as far as possible the same although Vortex has no SAFE variable. Start with 100 Shares @ 100 50/50 CER
I start with the Aggression Factors at 0, so the Buying good at
Buy= (PC-V)*1
****Murray has just this moment won Set 1****
In 4 consecutive Buys @ 20 drop in price I end up with this:
Value = 10000 Reserve= 2000 <-----Quite different from AIM zero Reserve N=244.1406 PV= 12000 Price= 40,96 Profit= -8000
I know Vortex acts different right from the start. In order to compare it with Standard AIM I need to know the size of the first Buy in your 4-Buy example, which is, I think
Buy1 = (10000-8000) -800 = 1200 . . . .Correct
In my second comparison I will adjust the Vortex Buy Aggression to match the AIM Buy1 To the Vortex Buy1 and then we will see how it works out to the end for the 4 weeks.
First I wil report the VORTEX Single Buy Case at 40.96:
Value = 14096 Reserve= 0 <-----Quite different from AIM zero Reserve The Buy Advice was > than Reserve so I had to temper the Buy to [prevent the Reserve going negative. N=344.1406 <-----This is 100 Shares more than in the 4-Buy Case! PV= 14096 Profit= -5904
Interesting Result to say the least but quite logical. Because of the 4-week wait the full Reserve value of $ 10000 could be spend at the low price of $ 40.96. . .This resulted in 1) 100 more shares and2) much $ 2096 less value loss.
These are the obvious and well known effects of delaying the buying to a lover price level. . This argument is the same for any investment scheme.
The interesting part here is that for a Vortex with zero Aggression, the results are 180 degrees reversed !!!. . . After 4 Buys I have $ 2000 left for in case the share price falls more. This means that the Standard AIM is a more aggressive buying machine than the Standard Vortex AIM with 0-agression ! This is something I had not discovered before.
Now it is time for more tennis. . .Federer is not at his best now but is holding off Murray in Set 2. . .Federed a bit ahead as yet!
I will adjust Vortex and do the run again later and then I will discuss more merits and pitfals in regards to my thinking on investing.
Regards,
****Ahaa. .Federer pulled out a bit of Magic to win a Set too!. . . . I opened a bottle of wine for that ****
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.