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Conrad.
Yes I have changed it slightly, but I have not posted the new changes yet. I'd like to do a bit more testing to see if the concept is going to work the way I proposed it.
The progressive part is where the factors start out low on a rally or decline and get progressively larger as the rally or decline continues. Each increment is based on a move of the stock price by a fixed amount like 15% or 20% from the last price point.
Actually one could achieve roughly the same effect by increasing the percentage move for a buy or sell point each time, like: 10%, 13%, 16%, 19% ETC.. until a move in the opposite direction takes place. These are just arbitrary percentage moves. I have not tested this theory.
So, the VORTEX Method is nothing more than a formalization of my gut-feeling AIM trading but with an accelerated trading action:
PC1=SV1
Market Order= (PC1-SV2)*M = Buy(or a Sell)
SV3=SV2+ Buy
PC2=SV3
I think I understand, like PC=Port Contr and SV= Stock Value except you did not say what "M" stands for. Is that the multiplier? Nowhere do you state what this is. Are you implying that you should set it to what you think the conditions warrant? If for example the stock was very bullish looking you might back off on the selling amount? Do you determine the "M" range by back testing? But then again you said the multiplier is "a constant as it is for Vortex." You need to explain it a bit better for me to understand. Thats me though, I'm more artistic than analytical in nature.
Yes, I did attempt to call DDCA "New AIM" at one time but it was a bit off the mark since it's not really automatic in the true sense of the word, because of the Factors variability. AIM is automatic if you follow the rules.
My web site has the original spreadsheet for downloading. Feel free to experiment!
Jibes
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DCCA is a good program.
I have been using it with vtss for the last 2-3 months and it has really done a good job for me so far.
uptime
Thanks for the huzzas!
The more I use DDCA the more I like it. Someday I'll learn how to set the factors to match the action. As I look at VTSS and your settings, ie. Factors of .8 sell and 1.3 buy I would say your right on the money. If the stock is rising like VTSS it's best to be stingy on the sell side.
Jibes
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jag
By the way, didn't Conrad mention that this 'New AIM' is very similar to Vortex?
Yes he did. If you ask me to explain Vortex though I would be hard pressed. Conrad should explain Vortex in layman terms! Then at least someone like me could understand it. #:>
He did run a test to compare the two and said they were quite similar. He also said we were both (as well as others) on the same track.
>I take it that the spreadsheet could be used for back testing various stocks.
Yes it can. Each time you want to test another issue copy the template to a new sheet. The best period to test is probably a years worth. set the buy and sell factors to the level that gives the best return for the whole period as well as the min % at cell C-1 . Experiment with these and this will give you a rough idea what the parameters should be set to. You could run the test for longer periods but the Factors might have to be set to some very low numbers to take in all the data.
The progressive method I spoke of has not been posted yet and might not be for a little while. Right now its the "DDCA PPTM " method without the progressive feature recomended at 20%.
Jibes
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Most fuzzy
>Am I correct that you would be buying an increasing amount (more than AIM BTB) as the stock went down? If that is the case you would run out of cash even faster than AIM BTB.
Not really. DDCA does not run out of cash as badly as AIM in general and the reason is: AIM increases Port Control as you buy while the price declines. By doing so, the more the price drops the more the spread between SV and PC become. That is why you can have another buy at the same price as last month, because PC has increased. If you can afford to keep feeding AIM money you will be rewarded greatly at some point down the road! AIM would beat DDCA by a lot in that case.
Yes, it is quite possible to run out of money using DDCA. Indeed, if you set the factor too high that will happen! DDCA does have an advantage though in that on any small rally some selling can take place and staunch the flow, at least to some extent. You could utilize this method on AIM as well I'm sure. Why not? If your deeply in the red why not sell a little on a rally? I think you would have to lower the PC to compensate though.
You can run out of shares too. This is not a problem to me as I would just look for another stock to start a new program. When the share number gets very low rel to the portfolio value then the effectiveness of those shares becomes almost null. If your near the top or at a consolidation zone you should get some buys to replenish your share supply to some degree. A steep climber is almost as bad as a deep diver but I would take the steep climber every time!
>Did you make at least one typo ("Sell" instead of "Buy" or "Buy" instead of "Sell")?
I'm fogged, please explain.
Jibes
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Hippocampi.
Good move, the market may just move down until Oct like it has for so long. Maybe not too far though! #:>
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Mark
>However the "factor" is based on the Fibonacci sequence.
I think the Fibonacci concept is very interesting. That would fit right in with the major moves of prices.
Jibes
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lcb
It sounds like a whole lot of people been on the same wavelength.
>What do you base your progressive factor on?
It's a tough one to explain. The factor was and still is a way to curb buying and selling. It's kind of like SAFE. At first it became apparent that I could run out of cash or shares if I didn't have a governor of some sort. The big problem and bugaboo is: What to set the Factor to? That is still a problem. I wish there was a way to have a variable factor that would adjust itself to the portfolio value or maybe share-value-to-cash ratio.. This could be done I'm sure but it would have to be done by someone much smarter than me. I cant seem to figure it out.
These numbers I'm using could be wrong! So be careful out there. I must do more testing.
Jibes
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Hipstercampi
You might want to give my Aim-like DDCA PPTM a look. It does much better than AIM on the down side. Aim is good but it does require much more attention or cash on major declines.
Though my website does not show it yet I have modified DDCA PPTM to 15% rather than 20% min moves for market orders up or down. This is still a personal choice and does depend to some extent on the issue traded. A stodgy old blue chip would need some adjusting.
The new and exciting change is it's now Progressive!. Let me explain.
When starting a DDCA PPTM program, the factors are set to 60% for a sell and 70% for a sell. Note this is the Factor % not the price change %, the price change % is 15%. That is a 15% move from the last price to trigger a buy or sell.
After the first sell for example the factor is raised to 90%. After that the next sell is a 120% factor and so on. If you get a buy on the way up then it's factor is still only 70% but if there are two buys in a row then that new buy is 100% and the sell factor is reset to 60%. As of this moment the factors increment by 30 points.
More simply put keep raising the factor on each subsequent move in one direction until a move in the opposite direction takes place. If the opposite move is enough for two transactions then the preceding moves factor is reset to it's starting value. If a move is only interrupted once resume with the same factor value that was in effect before it was interrupted.
So:
move up 1st time: Factor 0.60 X 15%
15%
move continues: Factor 0.90 X 15%
30%
move continues again: Factor 1.20 X 15%
45%
move down buy: Factor 0.70 X 15%
30%
move back up sell: Factor 1.20 X 15% (again)
45%
move continues up : Factor 1.50 X 15%
60%
so on and so forth.
Opposite true for down side moves.
The logic behind this is that on a good rally or decline I thought it would be better to get a higher percentage if it was a genuine rally other than just a jiggle. And if after a rally the price moves down why sell so much near the top of the move if the price was going to decline from there. On the other hand you would like to buy something in case it was just a small pull back. I also biased the factor to the buy side, 70% vs 60% for sells. just to help hang on to shares a little longer in case of a steep rally.
I ran a test on ADSX with regular DDCA PPTM at 20% for one year and managed to garner 100% return. I did again with DDCA PPTM Progressive at 20% and got a 200% yield!
I decided to go with 15% in the end because I would get more hits and more opportunities to get moves in the opposite direction than that of the prevalling trend . This may or may not be a good idea in the long run but it's what I'm doing for my personal account. Anyway I have not had time to check the validity of this theory since it's summer and other things are pressing at this time. If anyone wants to run some tests feel free.
Jibes
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Though this won't ans AIMster question direct it brings up a subject I have been thinking about lately and one that was talked about before this I'm sure. When doing long term studies (like 10 years) on blue chip stocks like those in the DOW 30 I have noticed that AIM did quite bad on most issues compared to buy and hold. Very bad indeed!
why?
As I thought about it, it popped into my head that the reason why was because the SHARE-to-CASH balance had become way out of whack. Of course these were tests usually done during the last 10 years when a big bull move was in effect.
toms "velie" takes care of this problem on a temp basis but it could make you a "buy and holder" with a small stake which may or may not be a good thing.
But for the long run a better way might be to do a re-balance every 1 or 2 years or when ever your STOCK VALUE--to -CASH ratio gets way out of whack. So, perhapes JJ's yearly reseting of STOCK to CASH ratio is the right thing to do, esp on the blues.
Jibes
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Tom.
good points. I keep forgetting about the fact that charts are adjusted for dividend distribution. As I see it the view does not reflect reality and so the price should give more buy and sell action than the chart depicts because of the adjustments.
the only reason I recommended what I did to linda is because see was lamenting her buy at a higher price.
Jibes
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Linda.
Keep up the good work. I like your attitude. If you have a plan and stick to it that is the best road to sucess.
Jibes
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Linda.
As I look at ACG and if it were me I would be looking for another issue to be AIMing. When doing AIM you should go for a more volatile issue. In a situation like that it would be easy to close out one and simply start another at the same stock to cash ratio. Thats only my opinion of course.
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schloss
Into each life some rain must fall.
Down markets are great opportunities!
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Ahem.....
Sure now and wasn't it me who said the nasdaq 200 day ma in post #101395 had turned from down to up on April 25th and wasn't it me who was subjected to ridicule by at least one poster. Just because I was bullish. It does feel good to be right though.#:)
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I heard that when the war was deemed a victory people went back to worrying about the economy and that had been driving the market down. B.S.! The market is going to go where it's going to go and they will always find a story to go with it. Except for very obvious events, e.g. Sept. 11th the market has a mind of it's own. Only the very, very long term picture can shape the market direction and we hope to be on the right side of the market no matter what!
Jibes
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As I see it, the market is quite bullish at this point. I'm not going to say run out and mortgage the house or anything like that, but clearly a change for the better has finally come. In the weeks ahead or even days the market will pull back. Then it will test the mettle of it's strength.
Jibes
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So you see, even after today the NASDAQ 200 day MA is stil up! Just shows how strong this market is. #:)
Jibes
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>...Never try to catch a falling knife I am speaking from
> experience (scars on my hands).
Very funny!
No, I agree. As I see it though and speaking from a TA point of view this has all the earmarks of a classic blow off. If played by using AIM (or DDCA) it could be a great play even if it goes down a little farther. From a long term perspective, in 3 years SNE has gone from $125 to $24 and if you had started at $125 with AIM you would be hurtin' pretty bad. Starting AIM on it now would be a far better bet. Just look at the I-Wave and you can see my logic. The market could go down for a short period here so SNE might not rally right away but clearly, this one is overdone.
I see it as institutional selling and they are very often wrong!
Jibes
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>NOPE
Are you saying you don't agree with me? It can't be denied that the MA is now up. Perhapes you meant that stockcharts.com is not the best. But it is so it could not be that. I guess I don't know.
Jibes
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>where is the 200dma turned up on nasdac
On stockcharts.com The very best.
http://stockcharts.com/def/servlet/SC.web?c=nasdaq,uu[l,a]daclyiay[pd20,2!b200][vc60][iUh14,4!Ug]&am...
I guess it's a nitpicking turn up but one never the less.
Jibes
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>on what basis you arrive at that conclusion - certainly not valuations.
True, not valuations. Rather factors based on TA., contrary opinion, the amount of money on the sidelines, fear and length of the Bear. Excess breeds excess.
Jibes
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Looks like your Trip top will get busted on the upside if your talking about the one starting in mid march. I see the 200 day MA on the NASDAQ has turned up. Is this a sign? The 200 MA will certainly come into play in the near future since so many follow and act upon it.
The market might be overbought for the near term. The NASDAQ looks like a pull back has started. But just remember this. The so called "bad economy" is mostly a fabrication of the left leaning mainstream press. If the dems were in power a different story would be out there. My point is this: The market has been overdone on the downside and ready to go up. I think we are getting ready for a good intermediate term rally.
I don't care one way or another sice I can make money no matter what, but I am concerned about others.
Jibes
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SNE
Looks like SNE might be in good position to start an AIM on.
It didn't lose money, it just didn't make as much as they expected. Can you see a world without Sony? Not me, I think it's a bit too big to write off. The vol today was extreme! It's my opinion Sony is in a major blowoff. It could go down farther but how much? It will be fun to watch.
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Steve
I could see a pullback but the whole market looks pretty dang good.
Jibes
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re SNE
A golden opp like this doesn't come along very often. We need people who follow earnings news so we can capitalize on it. This is a blow off of the highest order. It may not be the bottom but it can't be far.
Jibes
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K..
DHB looks great! I see no weakness at this time. It is my opinion the market will be strong in the near to mid future so hang on. I would be careful with that stop though, I could see it getting hit. you could sell a little near the Upper bollinger band and buy it back on any pullbacks around or just above the 20 day MA. Just look at that On Bal Vol!
http://stockcharts.com/def/servlet/SC.web?c=DHB,uu[m,a]daclyyay[dd][pd20,2!b200][vc60][iUh14,4!Ug]&a....
I just wished I'd played this one on my new DDCA PPTM method.
Jibes
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KauaiPI
DHB looks great! I see no weakness at this time. It is my opinion the market will be strong in the near to mid future so hang on. I would be careful with that stop though, I could see it getting hit. you could sell a little near the Upper bollinger band and buy it back on any pullbacks around or just above the 20 day MA. Just look at that On Bal Vol!
http://stockcharts.com/def/servlet/SC.web?c=DHB,uu[m,a]daclyyay[dd][pd20,2!b200][vc60][iUh14,4!Ug]&a...
I just wished I'd played this one on my new DDCA PPTM method.
Jibes
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If SCLN Slow Stochastic can stay above 50 for the most part then still bullish. That was a nice pullback but there could be a little more downside.
Jibes
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TF. Check out my "DDCA SRB" if you want to use charts. It works great! Could be used with AIM too.
Jibes
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My mind is reeling and I can't stop it!
One more variation of DDCA and or AIM! This one called PPTM. Not for the faint of heart though.
Jibes
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Wow! Yet another trading method based on DDCA called PPTM.
Check it out!
Jibes
http://jibes0.tripod.com/trendseeker.html
To all again.
I have posted the new DDCA SRB to my web site. It's in a rough state but usable I believe. What I failed to elucidate clearly is that the data derived from SRB is plugged into DDCA or AIM.
Let me know if you dont understand what I was trying to say in this web page, your feedback is important to me.
Jibes
To all.
I said I would have DDCA SRB on my web site soon. This did not happen and I'm sorry for getting your hopes up. I am working on it but it's a bigger project than I thought.
Jibes
TooFuzzy
One more thing.
I said "The only problem I see is that you would be a slave to charts and would have to check them every day (or nite) to see if a signal were given." In reality it would not be too big a deal if you didn't check them every day. After all this is AIM and you could always run the numbers if you came back from a two week vacation for example and maybe missed a signal while you were gone. You could at least salvage a missed opportunity by doing reg AIM update and take what you could get. Or use limit orders while you were gone.
Jibes
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Aaron.
I am working on the web pages that will describe DDCA SRB and should have them up this week.
Yes, with P&F charts it does lag if the 3 x's or o's are met. I have never used them though.
SRB uses the Slow Stochastic, RSI and Bollinger Bands as the three signal generators. Of the indicators I have studied I like the RSI as the best overall indicator. The Slow Stochastic as well as the PPO or MACD.
You can do the PPO XOver another way:
At stockcharts.com you can set two moving averages. Set one (the top one) to exponential 20 and the other to simple 30. You end up with two Moving averages of nearly the same data except the expo ma is more sensitive to price movements. When the blue line crosses the red line buy and when the blue crosses the red down sell. It's very close to PPO XOver and as a matter of fact I discovered PPO XOver because I thought I could do it that way with PPO and it worked. They do not always give exactly the same signals but are very similar.
Jibes
TooFuzzy
From a long term perspective the 200 day MA selling and buying method is a sound one in theory. The big problem then becomes WHEN to buy or sell when the MA criteria is met? Looking at the problem it's quite simple to at least have a trigger to let you know when. The RSI. When the RSI is at or below 30 buy and at or above 70 sell. This is an old trick, however it's generally used as a pure buy and sell. When used with AIM or DDCA it becomes a powerful method to get the most out of these trading systems.
A small exception to the rule is if the price falls to a new low (after a previous sig) or rises to a new high but the RSI does not quite give a signal... Take action anyway! This is a classic "non-conformation" and is generally rewarded. You would do quite well using this system.
The only problem I see is that you would be a slave to charts and would have to check them every day (or nite) to see if a signal were given.
Jibes
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Welcome Aaron
In theory the rydex rebal is a good idea. The problem I have found is that PPO Xover did not yield very good signals. Maybe the sensitivity could be changed by changing it from 15-16 to something like 10-11 or some other number. PPO Xover really works best on high beta stocks.
If you want to sell incrementally using RSI and or Bollinger Band tags would be a great way to go and this is what DDCA SRB will do.
If you check out my DDCA and soon to be posted DDCA SRB, I think that would be the way to go. DDCA is almost equiv to AIM but without the problems of AIM like running out of money and then getting locked out. DDCA can run out of money (and shares) at times but not to the extent AIM does. DDCA is far superior to AIM in my opinion. Right now I think a 4% to 7% min at 90% of the percentage change per week seems to work best. I will be updating the SpreadSheet very soon.
Otherwise PPO Xover would be a great way to go too.
Jibes
LC
Yes DDCA (Dynamic Dollar Cost Aveaging) is now the name. Even though it's like AIM it's still not AIM so out goes the name "New AIM".
I checked your SS against mine and I found a mistake with mine. It was a very small mistake but I fixed it and now our sheets agree. It's amazing how similar our updates were. even to the same column.
I am so happy with the results I'm getting. I now think every other week would be a good update period for auto DDCA.
DDCA SRB is in the works now and will replace SR, SR worked but the new way is more straight forward. It shall be great!
Jibes.
Matt
I think buying 10 low priced stocks at say $1.00 or so a share is a great idea if you are willing to wait for some of them to rise to a much higher value. Do check them out though an make sure they're not duds. #:)
Also keep in mind that a $1.00 stock can go much lower. I once bought 17,000 shares of a stock at 4 cents that did at one time sell for $1.00 (before I bought it) that went to 1 cent (after I bought it) and then it had a reverse split of 1/20 (like that was going to help) and is now selling for .008 cents a share. So my after split 850 shares are worth $6.80! I'm still waiting for my ship to come in on that one! #:)
Or you could do "AIM Re-bal" on 4 low priced stocks. However, in reality I think you should do this with a min of $2000 and only act on transactions that go up or down by a predetermined % for any of the 4. Of course this IS going to happen often with these low priced devils. The action should be fun but be prepared to run out of cash at times. This could very well happen.
I think playing $1.00-$5.00 stocks is OK only if you can stand to lose all or part of your money. Otherwise be careful.
You can check out "AIM Rebal" at my site.
Jibes
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Sorry about that, I got carried away to OT. ............
But I meant every word!
Jibes
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