is retired now but still kicking like a horse!
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This IS Fun TF! Trying to extricate ourselves from this entangled discussion. It is case of me trying to execute what you told me about virtual shares and we arrive at a discrepancy. I think this is due to using imprecise communication. Response again in red:
>>>>Gotcha! I did so, using a Holding Zone of 10% and a SAFE of 5%,
using the AIM Buy Algorithm. The stock value was reduced to 4500 from the 10% drop in share price. That gave me an inflated Buy of 5275 as compared to a Buy of 275 if I had used pc=5000!
I am not sure but you may not be PRETENDING you are starting with $10,000 in stock and twice as many shares as you really have.
Here lies our problem! In my first example I used your instruction that with virtual shares one needs to start with an actual equity = 5000(50% of what you rather would have done, but due to lack of cash one can start with V= 5000 and C= 10000 and PC = 10000. . .(as IF you would have started with V=10000). So the Virtual Element is in the higher PC.
This resulted in the setting the Buy Advice as:
Buy=(PC-V)-s*V
PC=10000
V=5000
s=0,05
Mathematically this would create a Sell Advice right away, but we ignore that because we look only at the situation when the price drops.
Now the price drops . . .etc etc. . .That is what I did and computed that the Buy would be 5275. But you responded and told me specifically that you got lost in the my example . . .it happens to mortals. . .
. . .
So you proceeded to explain what you meant with a new post in which you started with the PC=10000 and after the price drop V=8000 which is double the V=4000 that I used. From this I assumed that you were explaining to me that the virtual equity= 5000 also needed to be added to the stock value in the Buy Advice function.
I tried that too but it made no sense in the light of the purpose of using the Virtual Share Concept
At this point the Entanglement was complete
Now you "appear to be telling me that the Virtual Value of 5000 should not be added to the stock Value in the Buy Function but only to the PC
If the stock goes from $10 to $8 your stock value goes to $8000 not $4000 because you are pretending you are starting with 1000 shares not 500. It is NOT just the PC that you are pretending is double but the actual stock value and share count.
Now this is also different than you explained before. I interpret this as follows:
PC=5000
Vr = 5000
Vim = 5000. . .So the Buy Function becomes after the drop of 20% in share price:
Buy= (8000-5000) -0,05*(8000)= 3000-400 = 2600. . .2600 > 800
So you execute the Buy = 2600
PC2= 5000 + 1300 = 6300
Is that the correct interpretation?
This at least makes sense in the light of what I think Virtual AIMing is supposed to be.
Listen. I am not advocating LD-AIM I was just trying to explain it. So if you don't get it, forget about it.
After I have started to try to learn something new I do not give up easily. Did I get it this time ????
OK TF,
I see 3 responses from you so I will reply in sequence(without first reading the others). I prefer that so that the response is related to information at hand:
Made a mistake
>>>>>Stock goes down to $8
PC = $10,000 - $8,000 = $2000 <-------20% drop in price. What I see here is ~~ Standard AIM
It is best to use 5% SAFE and 10% min order size so .....
I would use the standard AIM algorithm as I learned it:
First I think you mean this:
Buy=(10000-8000)-0,05*8000 = 2000-400 = 1600 as I calculate it
$2,000 - $100 (5% safe) = $1900 which is greater than 10% of the $8,000 stock value so BUY
Ten% of 8000= 800. . .1600 > 800 so the Buy Advice of 1600 should stand.
Your Buy = 300 larger. This means that your are using a different Trade Algorithm. That is no problem in itself but I thought you stated that you are using standard AIM with SAFE= 5%(which I have used). You simply have used a bit different formula for calculating you Buy. Fine!
$1900 / $8 = # shares to BUY . Add that to the original 1000 shares
Ok this is trivial.
PC becomes the original $10,000 + 1/2 $1900 BUY order or $11,900
OK. This is trivial too: Old AIM Hat
>>>>>
PC becomes $10,000 + 950 (1/2 of 1900)= 10950
All this I understood already perfectly in 1980 or so! The fact that you would buy 1900 worth of new stock instead of 1600 is no problem and is simply your choice.
I do not see here any connection with Virtual Shares. . .which was the starting point of the discussion
Hi Conrad RE updating PC after a BUY
PC = $10,000
stock $10
Pretend shares total = 1000 (this is what you use in the formular)
Real shares = 500
Stock goes down to $8
PC = $10,000 - $8,000 = $2000
It is best to use 5% SAFE and 10% min order size so .....
$2,000 - $100 (5% safe) = $1900 which is greater than 10% of the $8,000 stock value so BUY
$1900 / $8 = # shares to BUY . Add that to the original 1000 shares
PC becomes the original $10,000 + 1/2 $1900 BUY order or $11,900
Hope that helps
Toofuzzy
**********************************************
NO. It does not help as it is not in line with what you told me in the previous message
I am a Nit Picker. . .I do exactly as I am told . . . .(in this case).
This is not at all what you stated in your explanation on using Virtual Shares. You Stated this:
Instead of using 10000 stock and 5000 cash, with Virtual Shares it becomes this:
Stock = 5000 and R= 10000 and PC= 10000. The PC is inflated with 5000 worth of Virtual shares
This means that the Buy Algorithm becomes this, after the 10% drop in price:
B= (10000-4500) - 0.05*4500. . . .I used SAFE= 0.05
In your example above you are doing something completely different than wat explained to me!!!
You started with stock Value = 5000. PC = 10000 and THEN when you set up the AIM you use an inflated PC= 10000 but also inflate the stock value itself with 5000 so that the stock value is the Virtual Value of 10000=5000+5000. Then when the Share Price is dropped by 20% you have this:
Buy=(10000-8000) - s*8000
That is a different Kettle of Fish and can be interpreted as an 100% Inflation on Three elements in the Buy Formula
The PC
The Stock Value
SAFE Amount
If THAT is the intention of what you meant then my result are, of course, quite different. From your results.
ZZzzzz
It is past 6 AM here!
Hi Too Fuzzy. . .we may be running in circles
I did interpret what I think you said and worked out the example and it made sense to me as to what you did: creating a large Buy as the price drops
You kind of lost me with your example. I will try to answer your questions.
1) You start with 10,000 = PC except you only buy $5,000 stock
Right! You inflate the PC with 5000!
2) You operate AIM EXACTLY the same.
Gotcha! I did so, using a Holding Zone of 10% and a SAFE of 5%,
using the AIM Buy Algorithm. The stock value was reduced to 4500 from the 10% drop in share price. That gave me an inflated Buy of 5275 as compared to a Buy of 275 if I had used pc=5000!
B-(5000-4500)-25= 275
So the result is a highly inflated Buy if you use PC=10000
3) You may run out of shares to sell (Your trades are twice as big compared to PC = $5,000)
Well, THAT is not the result I got. Following your instructions the First Buy is 20 times larger:
B=(10000-4500) - 0,05*4500 = 5275
4) It was recommended to me that SAFE be 5% and min order size be 10% to make things run smoother with LD- AIM (slow things down a bit)
You can obviously vary the SAFE and the Holding zones as you see fit.
Obviously there is a big difference between what I interpreted you said and what you meant.
Any highly knowledgeable computer nerds among you?
Have touched upon Vortex AIM in the previous post I have 1) a message, but 2) more importantly a computer question.
1 Recently I and the Vortex AIM programmer Chris Kruidenier have spend a lot of time improving the Windows program on various features and some repaired some bugs, especially improving the downloading features of share prices from American and Dutch Exchanges. Also the stock price and Fund Charts are more user-friendly now, clearly identifying the Euro and Dollar values on the Price List and the Chart y-Axis and the Cursor Flag.
Also the Dol/Eur and the Eur/Dol Exchange Rates are automatically updated every 10 minutes. . .This is particularly useful for currency traders.
The Vortex 1.26 can now be downloaded.
2 Request for Advice
An unexplained start-up problem with Vortex programs downloaded to American computers has developed some time ago and we can not understand why this occurs. Some people have reported that Vortex, after downloading the free Demo, some American computers refuses to start up at all, while in Holland this problem does not occur on computers sold here. On Windows 7 and 8 and on even on an old XP Version 2002 startup go fine.
We are completely baffles us to why this happens.
Vortex is bilingual and can be switched from English to Dutch and back at any time for User Interface as well as for the Financial Reports and Action Reports. Additionally it can be set to “System Language”. . the details of this escape me but the identified start-up problem that happens in America is according to Chris not the source of the US start-up problem.
We have not heard from a start-up problem in the UK.
I am looking for a US computer nerd that would want to give us some feedback on how precisely computers in the us are different for programs written in Holland before we consult the experts at Microsoft more that is done already. The person willing to help us can of course communicate directly with Chris after downloading the free Vortex DEMO. . .which is completely identical to the software after registration(only the time-lock is removed).
Vortex 1.26 can be downloaded from
http://www.ckweb.nl/vortex_us/index.php
E-mail contact for communication of error messages to Chris and solving the problem is provided on my Vortex AIM Page:
If the problem can be solved with your assistance in a reasonably short time you get the program for free or you could assign a friend to get it for free. Is the problem is difficult to solve some other solution needs to be discussed.
Regards, Any highly knowledgeable computer nerds among you?
Have touched upon Vortex AIM in the previous post and I have 1) a message, and 2) more importantly a computer question.
1 Vortex AIM New Release
Recently I and the Vortex AIM programmer Chris Kruidenier have spend a lot of time improving the Windows program on various features and some bugs have been repaired, especially improving the downloading features of share prices from American and Dutch Exchanges. Also the Stock Price and Fund Value Charts are more user-friendly now, clearly identifying the Euro and Dollar values on the Price List and the Chart y-Axis and the Cursor Flag.
Also the Dol/Eur and the Eur/Dol Exchange Rates are automatically updated every 10 minutes. . .This is particularly useful for currency traders. General price updates can be done automatically at each start-up or manually from the User Interface.
The Vortex 1.26 can now be downloaded.
2 Request for Advice
An unexplained start-up problem with Vortex programs downloaded to American computers has developed some time ago and we can not understand why this occurs. Some people have reported that Vortex, after downloading the free Demo, some American computers refuses to start up at all, while in Holland this problem does not occur on computers sold here. On Windows 7 and 8 and on even on an old XP Version 2002 startup go fine.
We are completely baffles us to why this happens.
Vortex is bilingual and can be switched from English to Dutch and back at any time for User Interface as well as for the Financial Reports and Action Reports. Additionally it can be set to “System Language”. . the details of this escape me but the identified start-up problem that happens in America is according to Chris not the source of the US start-up problem.
We have not heard from a start-up problem in the UK.
I am looking for a US computer nerd that would want to give us some feedback on how precisely computers in the us are different for programs written in Holland before we consult the experts at Microsoft more that is done already. The person willing to help us can of course communicate directly with Chris after downloading the free Vortex DEMO. . .which is completely identical to the software after registration(only the time-lock is removed).
Vortex 1.26 can be downloaded from
http://www.ckweb.nl/vortex_us/index.php
E-mail contact for communication of error messages to Chris and solving the problem is provided on Chris's ckweb website,
or you can use this address:
eng@vort[remove this text & brackets]ex.demon.nl
Remove [xxxx] and I will send you the correct e-mail address.
If the problem can be solved with your assistance in a reasonably short time you get the program for free or you could assign a friend to get it for free. Is the problem is difficult to solve some other solution can be discussed.
Regards,
Any highly knowledgeable computer nerds among you?
Have touched upon Vortex AIM in the previous post I have 1) a message, but 2) more importantly a computer question.
1 Recently I and the Vortex AIM programmer Chris Kruidenier have spend a lot of time improving the Windows program on various features and some repaired some bugs, especially improving the downloading features of share prices from American and Dutch Exchanges. Also the stock price and Fund Charts are more user-friendly now, clearly identifying the Euro and Dollar values on the Price List and the Chart y-Axis and the Cursor Flag.
Also the Dol/Eur and the Eur/Dol Exchange Rates are automatically updated every 10 minutes. . .This is particularly useful for currency traders.
The Vortex 1.26 can now be downloaded.
2 Request for Advice
An unexplained start-up problem with Vortex programs downloaded to American computers has developed some time ago and we can not understand why this occurs. Some people have reported that Vortex, after downloading the free Demo, some American computers refuses to start up at all, while in Holland this problem does not occur on computers sold here. On Windows 7 and 8 and on even on an old XP Version 2002 startup go fine.
We are completely baffles us to why this happens.
Vortex is bilingual and can be switched from English to Dutch and back at any time for User Interface as well as for the Financial Reports and Action Reports. Additionally it can be set to “System Language”. . the details of this escape me but the identified start-up problem that happens in America is according to Chris not the source of the US start-up problem.
We have not heard from a start-up problem in the UK.
I am looking for a US computer nerd that would want to give us some feedback on how precisely computers in the us are different for programs written in Holland before we consult the experts at Microsoft more that is done already. The person willing to help us can of course communicate directly with Chris after downloading the free Vortex DEMO. . .which is completely identical to the software after registration(only the time-lock is removed).
Vortex 1.26 can be downloaded from
http://www.ckweb.nl/vortex_us/index.php
E-mail contact for communication of error messages to Chris and solving the problem is provided on my Vortex AIM Page:
If the problem can be solved with your assistance in a reasonably short time you get the program for free or you could assign a friend to get it for free. Is the problem is difficult to solve some other solution needs to be discussed.
Regards, Any highly knowledgeable computer nerds among you?
Have touched upon Vortex AIM in the previous post and I have 1) a message, and 2) more importantly a computer question.
1 Vortex AIM New Release
Recently I and the Vortex AIM programmer Chris Kruidenier have spend a lot of time improving the Windows program on various features and some bugs have been repaired, especially improving the downloading features of share prices from American and Dutch Exchanges. Also the Stock Price and Fund Value Charts are more user-friendly now, clearly identifying the Euro and Dollar values on the Price List and the Chart y-Axis and the Cursor Flag.
Also the Dol/Eur and the Eur/Dol Exchange Rates are automatically updated every 10 minutes. . .This is particularly useful for currency traders. General price updates can be done automatically at each start-up or manually from the User Interface.
The Vortex 1.26 can now be downloaded.
2 Request for Advice
An unexplained start-up problem with Vortex programs downloaded to American computers has developed some time ago and we can not understand why this occurs. Some people have reported that Vortex, after downloading the free Demo, some American computers refuses to start up at all, while in Holland this problem does not occur on computers sold here. On Windows 7 and 8 and on even on an old XP Version 2002 startup go fine.
We are completely baffles us to why this happens.
Vortex is bilingual and can be switched from English to Dutch and back at any time for User Interface as well as for the Financial Reports and Action Reports. Additionally it can be set to “System Language”. . the details of this escape me but the identified start-up problem that happens in America is according to Chris not the source of the US start-up problem.
We have not heard from a start-up problem in the UK.
I am looking for a US computer nerd that would want to give us some feedback on how precisely computers in the us are different for programs written in Holland before we consult the experts at Microsoft more that is done already. The person willing to help us can of course communicate directly with Chris after downloading the free Vortex DEMO. . .which is completely identical to the software after registration(only the time-lock is removed).
Vortex 1.26 can be downloaded from
http://www.ckweb.nl/vortex_us/index.php
E-mail contact for communication of error messages to Chris and solving the problem is provided on Chris's ckweb website,
or you can use this address:
eng@vort[remove this text & brackets]ex.demon.nl
Remove [xxxx] and I will send you the correct e-mail address.
If the problem can be solved with your assistance in a reasonably short time you get the program for free or you could assign a friend to get it for free. Is the problem is difficult to solve some other solution can be discussed.
Regards,
Hi Toofuzzy, just a short response
A lot of virtual Deja-vu hits me when I read your text but I did not remember the details you no doubt have presented to me before. . .I will make an effort to understand it. . .maybe it is useful in Vortex
Normally you would start with V=10000 + C=10000 but because of poverty you could start V=10000 + C=5000
I can see that V=10000 would create rather large Buys so that the Cash Burn is high for dropping prices. You do not like that option as the Cash.Equity Rato is too low. OK.
Then you switch to V=5000 + C=10000 but you set up the AIM account as V=5000(R)+ 5000(Im) + C=10000 as far as the AIM algorithm is concerned it uses
B=(10000-V)- s(V) and Value is the devalued 5000 stock you started with. . .Hold Zone = 10% and Safe = say 0,05(5%). This then becomes:
B=(10000- 4500) - 225 = 5275
The Buy you finance from the Reserve of 10000 so the Reserve becomes R= 4725. If you would have started out with V=10000 and C= 5000 you would have had this:
B= (10000- 9000) - 450 = 550 . . . .Reserve = 4450
The Buy would be sharply reduced but your Reserve would still be significant. So the result of the Imaginary Shares in the PC is that that you can buy more stock and have a larger Cash Stack and you get the inflated Buy Advice from the Imaginary Shares in the PC.
In effect this to create something like this using the real numbers:
Buy =(PC- V)*M . . .M is a Multiplier, and M being almost a factor of 10 larger than if you had used V=10000 . . .right????
This is virtually(hahaha) identical to the way Vortex works with using a large Aggression Factor so that M= 9 or 10 or so. . .right?
If so, then in Vortex I would do this for example:
V=5000/C=10000/R=1000
fb = 0,9 Price drop = 10% on Hold Zone.
Your Virtual AIM Advisor looks like this in Vortex AIM
Buy= ( 5000-4500)* 1/(1-0,9) = 550*10 = 5500
Which is very similar to the Buy = 5275 in the Virtual AIM example for what you would have done
OK, I understand it now, and I will remember it.
My question in regards to using your idea in Vortex is also answered:
It is not necessary as Vortex already has that option to start with a Buy Inflation Factor. . .No virtual shares required!
Next question
What do you do is the share price goes up? Do you still use the Virtual 5000 in the PC ????
Test
Sell = (10000- 5500)- 0,05*5500 = 4225
V=1275 and R =6275
It would appear that with a 10 % price rise you get an Inflated Sell Advice and you virtually(hahaha) destroying your equity. . .Certainly that is not your intention!!!!
I conclude from this that if the price starts rising you quickly change the pc=10000 to V = 5000 and R=10000 and then Sell a small amount(other things being equal):
Sell = (5500 - 5000)- 275= 225. . .new R= 10225
This is more or less Standard AIM.
In Vortex I would use the normal Sell Aggression factor I would judge to be appropriate.
I seem to remember that for the example used here you would not keep the 5000 virtual shares in the PC. . .How do you update the PC after the first buy and how long would you keep it there? Hi Toofuzzy,
A lot of virtual Deja-vu hits me when I read your text but I do not remember any of the details you no doubt have presented to me before. . .I will make an effort to understand it now. . .maybe it is useful in Vortex AIM
Normally you would start with V=10000 + C=10000 but because of poverty you could start V=10000 + C=5000
I can see that V=10000 would create rather large Buys so that the Cash Burn is high for dropping prices. You do not like that option as the Cash.Equity Rato is too low. OK.
Then you switch to V=5000 + C=10000 but you set up the AIM account as V=5000(R)+ 5000(Im) + C=10000 as far as the AIM algorithm is concerned it uses
B=(10000-V)- s(V) and Value is the devalued 5000 stock you started with. . .Hold Zone = 10% and Safe = say 0,05(5%). This then becomes:
B=(10000- 4500) - 225 = 5275
The Buy you finance from the Reserve of 10000 so the Reserve becomes R= 4725. If you would have started out with V=10000 and C= 5000 you would have had this:
B= (10000- 9000) - 450 = 550 . . . .Reserve = 4450
The Buy would be sharply reduced but your Reserve would still be significant. So the result of the Imaginary Shares in the PC is that that you can buy much more stock on the first Buy and have a larger Cash Stack and you get the inflated Buy Advice from the Imaginary Shares in the PC.
In effect this to create something like this using the real numbers:
Buy =(PC- V)*M . . .M is a Multiplier, and M being almost a factor of 10 larger than if you had used V=10000 . . .right????
This is virtually(hahaha) identical to the way Vortex works with using a large Aggression Factor so that M= 9 or 10 or so. . . right?
If so, then in Vortex I would do this, for example:
V=5000/C=10000/R=1000
fb = 0,9 Price drop = 10% on Hold Zone.
Your Virtual AIM Advisor looks like this in Vortex AIM
Buy= (5000-4500)* 1/(1-0,9) = 550*10 = 5500
Which is very similar to the Buy = 5275 in the Virtual AIM example for what you would have done.
OK, I understand it now, and I will remember it.
My question in regards to using your idea in Vortex is also answered:
It is not necessary as Vortex already has that option to start with a Buy Inflation Factor. . .No virtual shares required!
Next question
What do you do if the share price goes up? Do you still use the Virtual 5000 in the PC ????
Test
Sell = (10000- 5500)- 0,05*5500 = 4225
V=1275 and R =6275
It would appear that with a 10 % price rise you get a highly Inflated Sell Advice and you virtually(hahaha) destroy your equity. . .Certainly that is not your intention!!!!
I conclude from this that if the price starts rising you quickly change the pc=10000 to V= 5000. . . R remains at 10000 and then Sell a rather small amount(other things being equal):
Sell = (5500 - 5000)- 275= 225. . .new R= 10225
This is more or less Standard AIM.
In Vortex I would use the normal Sell Aggression Factor I would judge to be appropriate for the case at hand.
I seem to remember that for the example used here you would not keep the 5000 virtual shares in the PC. . .How do you update the PC after the first buy and how long would you keep it there?
I noticed that with the virtual shares method after the first buy your share value is 9775. . .virtually to the level you wanted it to be at the start! From this I can conclude that your method simply amounts to stacking the Reserve and waiting till the stock drops to make that strong Opportunity Buy at low price.
Question
How do you update the PC after that first Buy?
Good try Clive!
Yes. To get to 10% gain on average at risk for instance, most of the amounts invested would have to be virtual shares. . . .
I have to admit that I have never could understand this idea of virtal sghares. . or at least not enough to be able to remember it .
At the University I was thought to calculate deformation magnitudes using "virtual displacements" of say a loaded bridge. Somehow the "virtual energy" required to do this would lead. . . after some other mysterious mathematical manipulations. . .to the [b[real displacement of the structure at a certain point of interest. This method appeared so unnatural to me I never got to understand it. . .probably it is due to an inborn resistance to unnatural things. . . .I developed a similar aversion to Langrage and Hamiltonian Operators.
No wonder that that virtual things go over my head. . .
I am afraid I am virtually stupid!
Clive,
Just an added comment on the Vortex "ladders" that are created with the Aggression Factors(AF). . . The Vortex Ladders are typicallynonlinear(apart from the fact that the limits are not determined ahead of time):
With The Trade Function = M*(V2-V1) . . . .M=1/(1-AF)
1) The trade amount gets smaller as the stock is sold off on the holding zone steps. The step size tends to 0 if M is small and if M is large one would run out of shares real fast. This is however opposite to my previous idea of the progressive ladder I had that would increase the trade size at the price reached the limits of the Trading Zone(selling off all shares at the top of the trading zone);
2) The trade amount for buying could increase when buying but also it could decrease. . this depends solely on the Buy Aggression:
* When M is small the stock value gets smaller as at some point at which the drop in stock value exceeds the added value from the Buy. This is a natural brake on the Cash Burn and it extends buying into lower prices( a frequently discussed topic);
* When M is large then the added stock value of the buy exceeds the drop in value due share price dropping but the Cash Burn is large. . .this would be great when the Trading zone is well defined.
So in a sense the variable aggression factors. . .in combination with the variable holding zones contain a range of possibilities to manage the Vortex Portfolio in a number of different ways in response to share price behaviors and the investor’s ability to “read” the market signals correctly
Admittedly with 5 variables to play with it is certainly a challenge to get the right settings for a chosen equity and to change them correctly as the price behavior develops, but the work required to get the "hang of the ropes" can be more than worth the "trouble".
Clive,
The range of your ladder appears a bit extreme. When the stock price rises 5-fold or so one might as well just get out and wait till it has drops great deal and start anew(if the stock is worth buying). . . When SPY starts diving sharply one would need a serious "signal" from the company’s mechanics(honest financial statements) so that one is confident enough that the stock will not vaporize at $3. .in order to judge the stock worth owning at that price.
Although I do fathom your ladder structure I have not continued experimenting with it myself in Vortex, so I can not grasp your analysis sufficiently well to comment on it in depth and compare it to my Vortex SPY-Run. . .Which is not really a simulation but more like a Shadow Investment. . .I intended to update the stock prices every week buy it actually ended more like quarterly updating with using weekly prices. The last two month I did change the Buy holding zone from 10% to 7% with hidsight. . this on the basis of that if it would have been a real investment I would have been “on the ball” more and have spotted the lack of volatility and I would probably dropped the buy holding zone earlier anyway. The aggression factors Buy 0.8 and Sell 0.6 have been kept constant from the start as I considered that about right for a portfolio growth-policy for a reasonably safe investment.
Another point is that with the trading cost($55) and interest gain ($270)eliminated from the run the Simple ROI on the $ 20000 would have been 2.96 %. . .showing the result of the rather aggressive trading that the settings represent. . . rather a good result for a stock that has lost 1,22% on its share price since January 3rd 2011.
Your ladder is rather conservative in comparison. The aggressive Vortex trading with Buy Aggression = 0.8 and Sell Aggression = 0.6 is something that typically would be appropriate for an equity with a rather high "Confidence Index".... I did not investigate SPY in that sense at all though. . .I had read about SPY on this Forum and the general consensus appeared to be that it was a safe equity that others were using as a good AIM Candidate.
Here are the 4 trades that were executed:
Cash Limiter Model used.
Sugg. Order // Executed Order
Starting Date(3-1-2011)
-$1.116 // -$1.116...(2-5-2011)
$3.950 // $3.950...(8-8-2011)
-$1.865 // -$1.865...(24-10-2011)
$2.626 // $2.626...(21-11-2011)
End Date(27-12-2011). . . .358 day period.
I suppose that if your ladder would have a smaller Holding Zone and larger trade amounts per step your ladder would have a lower top price and a higher bottom price. . .the yield would then have been higher too.
I think once one had become accustomed to a particular system he will get a good feel for it while others can not easily grasp how it is best to be used.
Regards.
Vortex AIM Results for SPY 2011 (Dry Running)
Starting Conditions
Original investment =$ 20000 (January 3 2011)
Stock= $ 5600
Cash= $ 14400
Interest on cash = 2%
Trading costs $ 10,95/trade
Buying Aggression Factor = 0.8
Selling Aggression Factor = 0.6
End of 2011 Status
-Holding zone Sell = 7%
-Holding Zone Buy = 7%
-Portfolio ROTAI Gain = 12.9 %
-Time Average invested capital = $ 6367
-Portfolio ROI Simple = -1.24 %
-Number of trades in 2011 = 4
-Trading Cost= $ 55
-Interest earned = $ 270
-Portfolio Value = $ 20806
-Portfolio Profit = $ 806 -
-AIM Trading Gain = $ 806-270 = $ 536
-Stock Value = $ 9787
-Reserve = $ 11019
SPY 2011 Performance - Simulation
Vortex AIM Results for SPY since 03-01-2011 28-12-2011
The price of Spy has dropped 1,22% since the start of the year. Initially I used Average Prices =(Hi-Lw)/2. This creates a less volatile price than using closing prices. I have changed to weekly closing prices.
The year was started with rather high Hold-zones close to 20% based on a 10-year optimization with historical prices but I have abandoned that as the volatility is to low(I use my judgement to change the settings I see fit). Current settings and year-end results are:
Starting Conditions
Original investment =$ 20000
Stock= $ 5600
Cash= $ 14400
Interest on cash = 2%
Trading costs $ 10,95/trade
Buying Aggression Factor = 0.8
Selling Aggression Factor = 0.6
End of 2011 Status
-Holding zone Sell = 7%
-Holding Zone Buy = 7%
-Portfolio ROTAI Gain = 12,9 %
-Time Average invested capital = $ 6367
-Portfolio ROI Simple = -1.24 %
-Number of trades in 2011 = 4
-Trading Cost= $ 55
-Interest earned = $ 270
-Portfolio Value = $ 20806
-Portfolio Profit = $ 806 -
-AIM Trading Gain = $ 806-270 = $ 536
-Stock Value = $ 9787
-Reserve = $ 11019
Hi Everyone!
Along with my New Year's message I have added some information on the Vortex AIM program updates for easier management and correction of some features. New AIM investors might find it interesting:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=70378137
Regards,
The Year End is approaching fast and I want to take this opportunity to say a few things that will be usfull for 2012. My opinion is that the world will not end next year and I predict that the Stock Market will keep going Up & Down frequently just like it has done each year before. Good news for AIM Investors!
Happy New Year to everyone!
As most AIMers know I have not been super active on the AIM Discussion Platform the last few years. In regards to my Vortex AIM development we have been working on adding various peripheral features but left the Vortex AIM Core unchanged. The principal feature to have great flexibility that will allow the investor to invest very conservatively (small trades) or very aggressively (large trades) is still the same.
The changes made over the years and specifically recently has been focused at increasing various features to make using Vortex AIM easier.
The most recent changes are related to:
* Downloading stock prices from Dutch and US Exchanges;
* Mixing US$ & Euro Fund Currencies in a single Portfolio;
* In addition to creating new portfolios & adding new funds manually on the main Display Window there is now an automatic procedure for creating
New Portfolios and New Funds via the File Pull-down Menu so that the new fund is immediately defined with the current stock price from either the selected
US$ Fund List or the Dutch Fund List.
Other than these main features we continually adapt features if we find they are not defined in an optimum way.
I have also created an English version of a Dutch Power Point Presentation (PPP) for Vortex AIM that was used at an Investment Conference of the Holland Computer Club. This PPP can be requested by e-mail (see the Information Page above). In the very near feature it can be downloaded from this website:
http://www.ckweb.nl/vortex_us/index.php
At this time only the Dutch PPP can be downloaded directly. These PPP downloads are provided free of charge and contain examples of Vortex AIM Trading in Cash Limited and in Turbovest Modes.
Regards,
Conrad Winkelman
I have added some changes to the Information page
1 Power Point Presentation with numerical examples.
In Dutch and English:
Dutch: http://www.ckweb.nl/vortex_us/index.php
English: eng@vortex.de[remove this text & brackets]mon.nl
2Added a Dutch Language document in which the Vortex Method is described in great detail: eng@vort[remove this text & brackets]ex.demon.nl
See Information Page above.
Conrad
Hi TooFuzzy!
I was not intending to open a new debate on this. I simply stated(just like Clive did) that if you AIM two stock that exhibit price cycles you reap the profits of both. It makes no difference if these stocks are near inverses of each other or not. . . It is clear that if one stock rises as the other one drops you do not run out of cash easily. . .that's clearly a bonus!
I do not understand your point on your statement:
. . .no matter what you pick they will NOT act exactly as inverses each other and the one that is supposed to be the "inverse" fund will not track accurately
Who claimed that it was required that they should de be exact inverses??? That is clearly irrelevant!
What do you mean by that the inverse fund will not "track" accurately ?????
Whatever it is. . .by the argument in the opening statement it would not be relevant anyway, so it is only curiosity that makes me ask it
Logical conclusion Clive. . .& Aimdeveloper,
Two investments, both start at a price of $100 and you buy $50,000 of each (500 shares).
. . .
Assuming both stocks revert back to a $100 price, you're holding 1042 shares in total, worth $104,200 and have made a 4.2% capital gain - compared to a buy and holder who would be at +/- 0% gain/loss.
Can I assume you had Both SAFEs at 10% on this?
With Vortex AIM with the Trading Aggression at 0 for Buy & Sell & 20% Hold zone I too ended up with 1042 shares in the Price Turnaround (same + and – trades as Standard AIM) and with a gain of $ 4,160. . .this difference being due to using fractional number of shares in the automatic Trade execution calculations). So, the Vortex AIM default setting for the trading aggression gives generally the same result as standard AIM (Vortex does not use the SAFE).
With the Trade aggression for Buy * Sell both @ 0,5 . . . which is only moderately aggressive. . . the Turnaround Gain is $ 8340. The inverse stock trading profit is not a surprise . . .it is of course quite logical. . .From an AIM perspective these stock are essentially unlinked and the cycle profits accumulate on both stocks.
When I did some testing on trading with Inverse Currency Pairs a while ago I was initially rather surprised that I did not end up with a profit in turnaround trading and thought initially that I was doing something wrong with the setup of the portfolio's but after a careful analysis I discovered that the results were correct! Considering that I was trading in a realistic setting from a base in Holland with the Euro as buying currency the inverse relationship profit that occurs with trading stock is wiped out by the inverse currency relationship of the Currency Pair Unit Values. . . .Essentially it came down to: X*(1/X)=1 in the turnaround trading . . . Plus I suffered (hypothetical) commission loses with the FOREX Account.
If I would have asked your advice on that no doubt you would have concluded that I would get that zero-result within two seconds without even going through the calculations .
I have been running a Dry SPY Portfolio since the beginning of this year and the positive yield today on the average invested cash is almost 18%/year, but that is allmost 50% due to the 2% interst gains on the cash*. The rest is due to AIMing from three trades after starting the investment and at a stock price loss of 1,89 %.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68649589
* Not to forget the $ 22 Dividend for the $ 0,625/share that was added to the Reserve
Vortex AIM Results for SPY since 06-06-2011 till 31-10-2011
The price of Spy has dropped 2% since the start of the year based on price Average=(Hi-Lw)/2. This is possibly a less volatile price than using closing prices. However using a simulation I see no other way of selecting a better ficticious price.
-Max price gain from start = 4.38 % on May 2nd
-Max price drop from start = 9.3 % on August 8th
-Three trades were executed after initial Buy
-Holding zone Sell = 10% Changed from 19% on June 6th
-Holding Zone Buy = 7.5%
-Portfolio ROTAI = 17.9 %
-Portfolio ROI Simple = 3.4 %
-Buy & Hold ROI = -1.98
Interest on cash = 2%
Trading costs $ 10,95/trade
The Sell holding zone was dropped to 10% from 19% increase volatility capture.
Some Simple Investing video. . . . hhmmmm. . .
This guy has discovered AIM, but doesn't dare to give it that name
It's terminal. . .There is not cure for it!
Aimster, Thank you!
You gave me the clue as to what to do:
"In God we trust, all others pay cash!"
Everybody has to pay cash!
I got a good laugh out of all that shit that is happening!
Now I don't feel alone anymore!
As I mentioned before I had lost all recent files from my computer.
Recently I received a copy of the SPY Excel Spread Sheet form one of the people that had purchased it. I have updated that spread sheet till June 6th 2011. On that day the First Sell was triggered since starting the Dry Run January 2011, with parameters optimised for the previous 10 years. Today the Portfolio stands as follows.
SPY Portfolio: . . Initial Inv. = $ 20.000
Start/End Date: 03-01-11/06-06-11
Initial Cash $14.400 72,00%
Initial Sock $5.600 28,00%
Portfolio Value $20.249,63 06-06-2011
Profit: $ 249,63
Sell 06-06-2011 8 shares @ $128,87
Stock price Change = -1,34 %
Portfolio Simple ROI Annual Yield %= 3,40
Portfolio ROTAI Annual Yield % = 11,046
Number of shares at 06-06-2011= 36
Reserve/Equity Ratio at 06-06-2011 = 3,37
But I can't even trust my self, so what's a guy to do?
Hi Ex. . .Misfortune is the story of my life.
The Universe hates me.
Grabber, as I explained in the previous post it was a human error made by McAfee people. . .the Data was removed by way of an incorrect procedure. . .The same sort of thing happened by Paradigit (the Computer Shop) when the person that took my Order to install Windows XP on the new disc I had just bought from him for € 60 and to leave the System Disc(600 GB) as it was as an extra external drive(that part cost me € 20 extra). Then he ignored my other instructions.
Afterwards, when this the procedure error was discovered Paradigit people told me that the technician had done a "Standard Re-install" and that means that Windows was automatically installed on the same disc Windows was installed on in 2007 when I bought the computer! This old 300 GB System disc had previously been changed to my Data Disc.
So, even when one gives the correct instructions when people screw up no protection system can prevent this sort of thing.
Well, I figured McAfee's On line Backup would be OK but the "wipe out" was not due to a technical problem. I got an extension on my account due to the McAfee Problem in 2010, so the expiry date on my new account was changed from June 2011 to October 2011. When I wanted to get my back-up data reinstalled in April 2011 the McAfee computer had still the old expiry date attached to it and refused to do the back-ups which had been made to up April 2011. I made the McAfee people aware of this problem and they promised to "fix" the account error, but instead because of the "fix" they conjured up all the back-up data was removed from their server AND also from the their own back-up server. . .at least that is what I was told. They could not do a retrieval.
At the start of April I had to have Windows XP reinstalled due to operational problems. So I told the Computer Service Centre to install a new hard disc @ 600 GB to install Windows on and to leave the other hard disc @ 300 GB as Data Disc. . .everything important was on it, included hundreds of scans of slides and photos of the past. I am sure the guy that did the work was called Murphy:
He re-installed Windows on the original disc, wiping out all my data files and not even formatted the new disc, so when I came home I thought I had no new disc for which I paid € 60 and could not find any of my data.
Next day back to the shop. . .you can imagine I was $%&^*(&$%#!~. I got the money back for the Service Fee and they said "sorry". I had a new empty disc after they formatted it.
On top of this McAfee had made an error in re-configuring my Security Account and wiped out 5,3 GB of Back-up Data from their Back-Up Server. . .nothing could be recovered! They said “sorry” too.
On top of that I had my own back-up system but did not back –up often enough giga amount of new data was not backed up. I said "stupid".
On top of that I had an Online “Drop Box Back” up System but hat used it incorrectly. .instead of placing original files into Drop Box I only copied files that were important, but not often enough. I said "stupid" again.
So in the end I have recovered only a fraction of the important data. . .I was hoping that on May 21 the world would end, as it was predicted by some nut Preacher in the USA. . .but again I was out of luck. . .this cruel world just goes on and on!
When will it end?
So, I am not in any mood to redo the Spy Dry Run. . . everything I had in Vortex is Gone with the McAfee Wind.
Hi Fuzzy,
Every time you execute an AIM Trade Advice you are making the decision, so you manage the investment and you call the “shots”. I recall the comments of a baseball Umpire: “There are Balls and there are strikes, but they ain’t nothing until I call them”. You are the Umpire of your AIM Game.
Only when you turn AIM into a "hands-Off" Trading Robot then you let AIM make the investment decisions. . .you can then let AIM do its "managing" and not look at it for as many years as you do not need the money. . . until you decide to liquidate the investment.
All in all I figure you are a doing a quite a lot of managing and as long as you like the results, win or lose, you are doing a good job!
As for me, I am not investing. . .I try not to spend too much of the little savings I have left.
I use AIM to keep me from making decisions.
Still you are bound to decide what to buy, to bail out or not to bail out, to invest more money or not when the opportunities are right, to change funds or not. . .to decide if AIM is giving the correct advice or not. You still ought to be the Main Manager of Your Money. . .Managers decide all sort of things!
Hi scaldave. . .possibly other have already replied in depth as to the wisdom of sharing cash. . I am just replying in regards the fact that I have developed a scheme for this in Vortex AIM. I do not pretend I am wise.
1) I divide the total Cash Pool to all the funds in a Portfolio and proportion the allocation to the share value of the Funds automatically. . .when one fund gets bigger it gets a larger proportion of the cash.
2 In one option I allow Negative Cash. . This is the TurboVest Option in which you can let the Negative Cash be as large as you want under the assumption that you know that that you are running higher risk if things go bad with stock prices. The idea here is that YOU let the Negative Cash be as large as you can afford to lose. . it then comes down to your judgement as to how much you can afford to lose. . .YOU are the Manager.
3 When some of the funds become relatively small the smaller allocation of the Cash (+/-) Pool will result that the Trades are sooner limited by the Minimum Trade. . .small fund may then sit there waiting “foaming at the bits” for more cash if you have the Cash Limited Option(No negative cash). With the TurboVest Option you simply execute the Recommended Trades as long as you can justify doing so. Its YOUR MONEY.
In these options I am not judging how this will work out in any particular case. . . it will require more attention to protect your x$%hw#2% if you use the Turbovest Option than if you use the Cash Limited Option but then too it is YOUR MONEY and you should have proper protection guidelines for your self as to when to bail out.
In this sense Vortex AIM is no different than Regular AIM you van always pump in as much money as you are willing to lose and you can protect yourself in the same way by only investing in stocks you are prepared to own.
Regards,
The Japan Earth Quake occurred on 11 March 2011 in the afternoon.
On 10 March the DICO stock rose to almost € 4 from penny-level the day before.
I suspect someone with a lot of DICO shares knew the earthquake and the tsunami were coming. . . or could it be that at the time the quake hit in Japan at just after 2 PM on the 11th the stock market watchers that had DICO shares were still on a trading-day trading shares. . .
Yes, that is possible for DICO Share Holders in Asia were then just active in the morning and afternoon sessions. . .I bet THAT is the reason. . in Holland it was only about 2 AM in the 10th of March and as soon as the market opened the Earthquake and Tsunami were Old News!
Aimster
Has anyone thought of a way to AIM options? I'm thinking income stream
I did. My reasoning was that you can AIM anything that has a variable value. In principle that is of course still valid.
Buy options and other derivatives, as you have already aware of, of course, run down to zero in a generally predictable way, and the exceptions are not predictable without having your nose and ear in the market.
For example if a (deep diver)^2 on the share value suddenly reverses strongly on the bottom at penny stock value most likely you might already have bailed out. . .Consider Dico International (Bed Manufacturing):
I was playing that one on the penny stock values of a few cents and then on account of the news about the "bankruptcy" proceedings I just dropped it as I figured it was a lost cause. . .just lost some trading costs. . .no big deal.
Then a little while ago just after the Earth Quake & Tsunami in Japan the penny stock went to the tree-tops to € 5:
1-3-2011/ 0,0600
2-3-2011/ 0,0700
3-3-2011/ 0,0700
4-3-2011/ 0,0800
7-3-2011/ 0,0800
8-3-2011/ 0,0700
9-3-2011/ 0,0700
10-3-2011/ 4,55
11-3-2011/ 4,55
14-3-2011 / 3,50
15-3-2011 / 2,95
16-3-2011 / 3,03
17-3-2011/ 3,35
18-3-2011/ 3,84
21-3-2011/ 4,30
22-3-2011/ 4,50
23-3-2011/ 4,40
24-3-2011/ 4,40
25-3-2011/ 4,30
28-3-2011 / 4,40
29-3-2011/ 4,50
30-3-2011/ 4,46
31-3-2011/ 5,00
1-4-2011/ 4,97
4-4-2011/ 4,75
5-4-2011/ 4,75
Maybe the shaking in Japan woke up some people J
Possibly this Revival was due on account of the disaster potential in Japan . . .all of a sudden there was a market for beds ,and someone started up the production for exporting bed, or for all I know the factory was already in Japan, or in China. . .the details are irrelevant now. . .I have not investigated this so it is speculation but it is a likely scenario. . .typically for a “IF I HAD. . .” story
Even on the share value I could have made a killing^2 IF I would have sat out the penny stock investment I had in late 2010. . . but I didn't.
With options bought on the 9th of March 2011 for a pittance the Killing would have been tremendous. . .I did not check out the IF-figures.
The point here is that for such events AIM is useless as AIM is focused on long term cycling of solid equities so that you can afford not to look at e market for long periods.
To take advantage of opportunities like DICO you need to be on top of things and have a nose end ear for the opportunities and act quickly. . .investing would have to be a daily activity for one to catch the “flying bird eagle”. If you AIM an Option and you see it go to zero value as most options do at some point and you have no "feel" and "connection" for what is happening in the market then you will, like I did, simply bail out. Occasionally people hang on to penny stocks (I have done hat too) and let it ride, taking the change it might one day Blow UP.
Either way. . for that Method you do not need AIM a all. . you can simply invest in such cases “as they appear in your scope” with the expertise for this you have in your head. . .
AIM is for Sissies. . . .
Hahaha. . .IAM a Sissy now!
So, I ended up keeping Lucent and replacing Nortel. Lucent has since came back, while Nortel did go bankrupt.
That's the benefit of studying the company, go into the basement and open all the closets to see if there is a corpse or two hidden there
I did the same thing(studying the financial statements)with Holland Sea Search years ago. . .it was essentially a dormant penny stock company but had hidden assets(oil drilling rights) and no corpses in the closets. . .several years later the Warrants exploded in value more than 10-fold and I made a bundle selling at Fl. 825. . . the price rising to Fl 1200 for a while and I set the asking price at Fl 1500 for the last few shares I had, but no one bit the bait. I sold the last batch at Fl.750 or so.
Good old times.
PraveenP, your suggestion to use the stop loss principle at X% drop in value hits upon an OLD problem: repetive buying of stocks that loses value. . .a viscious circle.
In your example you propose to sell off the remainder of the stock that has already dropped X% of its initial $ 4000 value and then buying $ 45 of a new stock. Let's see if I understand it with x=10%
Stock XYZ was 4000
Now it is 3600 at 10% drop and you sell the 3600 and add 900 cash to buy 4500 of Stock ZYX and then set the X= 10% again. Now, for the moment neglecting stock-picking skills there is a good probability the stock ZYX begins to drop right away for the same reason Stock XYX was dropping in value. . .so in a little while Stock ZYX is worth 4050 and the Buy Advice stand at 563(same proportion as before) then you bail out from ZYX and buy a Stock YZX for the amount 5063 using the same methodology and then you wait for the next 10% drop . . . .this is a well known trap for this system if you do not look beyond the automatic management system on which AIM is based.
So, again one needs to apply additional information for good investment results and one needs to bail out only if the stock is no longer worth owning.
In my example the 2x 10% drop on two different stocks would have been better taken on the original Stock XYZ:
4000*0,9= 3600 Buy Order - 500
(3600+900)*0,9 = 4050 after the first 10% drop & Buy Order = 563
(4050+563)*0,9 = 4152
Total extra investment = 1063 in two 10% drops in value of the same stock.
The advantage here is the third round having waited again for a 10% drop in price the share-value of the Stock XYZ is now (0,9)^3 =0,729 of the original price and the third buy gives you the extra stock at bargain basement prices.
So a stock that starts off at $ 10 will be bought at $ 7,29 the third time around. The total drop in ahsre value is only 27,1% after a 3x 10% drop.
This in contrast to buying 3x a new equity at their initial price of $ 10. after the third drop one has suffered a 30% drop in value of the already invested money in the previous two rounds. . Plus one does not get the advantage of the leverage on the quantity of shares that one can buy at the reduced share prices from $ 10 to $ 7,29.
So, in comparison with switching stock one is well advised not to switch stocks if the original stock is worth owning at a price of $ 7,29.
Vortex AIM Results for SPY since 03-01-2011 till 15-03-2011
The price for Spy has been almost stable since the start of the year
based on price average = (Hi-Lw)/2
Max price gain from start = 4.38 %
Max price drop from start = 0.06 %
No trades were executed
Holding zone Sell = 19%
Holding Zone Buy = 7.5%
Portfolio Gain ROTAI = 7.65 % . . . Annualised. Based on 2% Interest Gains-Trading Cost.
ROI Simple = 2.15 % Annualised
For commentary input price change per 16-03-2011 see:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=61045289
Vortex AIM Results for SPY since 03-01-2011 till 15-03-2011
The price of Spy has been almost stable since the start of the year based on price Average=(Hi-Lw)/2
Max price gain from start = 4.38 %
Max price drop from start = 0.06 %
No trades were executed
Holding zone Sell = 19%
Holding Zone Buy = 7.5%
Portfolio Gain ROTAI = 7.65 % . . . Annualised. Based on 2% Interest Gains-Trading Cost.
ROI Simple = 2.15 % Annualised
Having reconsidered the price fluctuations for the previous 11 years it is shown that the average Daily (Hi-Lw)/Lw variation on the monthly price history has been 8,5 % and the highest 39,6 % it is clear that using the average of the Hi-Lw cuts out a lot of volatility. For this reason starting from March 16 I am changing the price input for the Trade Advisor to the High and Low prices and then I assume GTC Order Execution. So if a Low price or a high price occurs the Trade is executed on that price.
This would reflect reality for the Dry Run much better although it would not be the same as what would happen in a real case.
For a real GTC Order the execution price might be lower or higher than the GTC Price. This would give better performance than the Dry Run, so that the interpretation of the Dry Run test is a conservative one.
100 <OT>...a tin of smoked fish...
200 We do not put smoked fish in a tin. I might get it vacuum sealed though but there still will be Dioxins in it.
300 Clive,
400 IF you visit Holland, THEN give me a call.
500 I will get you some smoked eel and beer.
600 GOTO 200
What's in name?
I called my business Vortex Engineering ad my friends said:
"That a bad name. Your company is bound to go down the drain".
Initially I made good money so that belied the prediction.
Then I started the Vortex Method for investing and I made a lot of money to.
Then there came two people that each stuck a knife in my back. That cost me € 50000 in after a 5 year Law Suit in 2006. All the money I had and had stuck in my house since 1987 was gone. Luckily the house had appreciated in value a lot so after losing the € 50000 I was back to zero but no debt. . .a welfare case.
I no longer wear a suit.