Hi Heartland99:
I can see right away the similarities between AIM and Money Spinner. I do like the idea of a Minimum Buy Increment proposed by Chakrapani--and this is easily incorporated into any AIM system. It corrects what you call the "Lichello flaw" of residual buying at the same price level. It also preserves cash for deeper corrections, which I feel we may be on the cusp of right now.
Interesting point you made there. From the step-wise procedure . . .from the fact that there is no iterative algorithm . . .one never gets even confronted with a Buy-algorithm at any price in tern of a fixed Holding Zone. . . The procedure simply gives a lower price using the Initial Price Interval. In this case the
(5-4,17)/5 = 0,83/5 = 0,166 and would amount to a Hold Zone 1 = 16,6 %
and with the next step this is = 0,83/4,17 = 0,199 or a Hold Zone 2 = 19,9 %
the next step 0,83/3,34 ----> Hold Zone 3 = 24,9%
from which is becomes quite clear that the Hold Zone automatically increases as the price goes down. This indeed is an interesting method for Trade Delaying and it happens to be a simple Progressive Method at that: based on the Constant Exponential Decrement principle.
This is a good feature.
The other conclusion I draw from the Step-wise Buying is that at the depressed price there is a good Buying Opportunity the Money Spinner calls again for buying 100 shares at a price of 4,17. . just like the Initial Buy at Price=5. This is not a good feature compared to say buying low priced shares with a fixed amount of money. . .or buying the shares with a Progressive Buy Amount. I refer here to the powerful AIM principle of the Skewing feature: Buying at progressively lower prices gives progressively greater Share quantities into the Portfolio.
But at the next step downwards at a price 3,34 the procedure calls for Buying 390 Shares. This is a significant increase!!! It means that this works out very similar to what happens in Vortex and AIM at a progressively larger Buy Hold Zone!
The Delaying tactic present in the Money Spinner looks a lot like various other schemes we have discussed on the AIM Forums, among others Clive's various proportional and progressive Ladders!
What I developed for Vortex years ago was an Exponentially Progressive Buy. . .essentially identical to what happens the Money Spinner with a very simple technique. I have not managed to make my Exponential Buy idea easy to implement because I attempted to tie into the variable Trading Ranges that would occur in practice. . as a trading range widens or narrows the hold zones should move with then, based on some Reference Hold Zone that would be defined and in this way not only the Vortex Buys would be progressive but the holding zone would also be progressive.
The constant Min Buy Interval in the Money Spinner is rather arbitrarily selected it would seem and based on the $5 Starting Price, not at all to a variable Trading Range width. How does this technique work for a stock price of 100 to start with???? I have no idea as yet. . . I need to read more of the Money Spinner
Thus, if one would use an Automatic Delay Feature for increasing the Holding Zone as a function of a dropping price and retain the progressive Automatic Buy-structure resulting from that Trade Delay then it would for sure become a very powerful AIM-derivative.
And it appears, thus far, that the Money Spinner has these features in itself already, except it is, not necessarily, automatically applicable to other price levels, nor to a variable Trading Range.
Automation techniques for this have been proposed before, and possibly the methods Clive suggested before may well be executable in the form of automatic adaptive equations, but it appears no one has achieved to implement these yet. As for myself I have found it rather difficult and problematic to attempt such an automation. Needless to say there would have to be various new parameters added to the ones we already have. . . .Will an AIM with 10 variable parameters be actually workable, other that for a few people?
I doubt it.
