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I track each AIM account separately but pool money in a single account. As such I can take my cash balance to ‘negative’ numbers in individual accounts and perhaps buy more of a sector that is offering great value. It also allows me to get by with a bit less total cash allocation.
Another back test can be found if you Google ‘AIM Lichello backtest’ The analysis on the Tough Nickel site is a good one
Adding to OAG’s input
You might want to check out this sensitivity analysis of the AIM system
https://toughnickel.com/personal-finance/Sensitivity-Analysis-of-AIM
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In a nut shell.. the two most critical variables were ETF /Stock selection...AIM thrives on high beta (volatility) ETFs/stocks and starting equity to cash ratio. Timing was found not to be a significant variable although I believe that would not be true for the super high beta etfs such as SOXL (triple leveraged semi-conductor etf)
Oops disregard . I was looking at the wrong data
It’s interesting that the risk number are actually declining as the market makes new highs
Thanks OAG
I had thought that might me the case. Thanks as always for your advice
Question about ZigZag
I am setting up a new AIM account and went back to the ZigZag post... it talks about being on the right and wrong side ...what does this mean in this context
Toof,
Great work on the sales....it does make it fun.
Toof,
I agree...I normally go with 66% equity and 33% cash for entry positions but also that varies by market risk conditions. Fortunately, I have had several of my AIM accounts selling lately just as the risk is building in the market. Ideally, I would like to wait until my AIM engines are giving buy signals again before adding over and above cash.
On an unrelated topic it really is funny how the discipline of AIM changes your mindset. In a strange way you look forward to market declines for the opportunity to get more shares 'on sale'. Conversely, prior to AIM I had a very difficult time selling into a climbing market. Now I view it as replenishing the reserve to buy more shares again.
Tom,
Thanks a Ton for the quick reply. I have played with it and it seems to keep all the machinery working I was just worried I was missing something. I really appreciate all the advice you provide.
Tim (AKA AUC)
Tom, Quick Question on Adding Money,
I want to add significantly to one of my AIM accounts. Mr. Lichello warned against this stating that it would overwhelm the systems asset memory and that such adds should be a relatively low percentage of total invested capital. I have played with it in my spreadsheet and don't see any difference other than the obvious add to portfolio control moves up the buy and sell points. I am sure you have run across this before.
Do you think I should do this or just track a separate AIM account of the same entity.
Thank, AUC I
Toof,
I have not really had that problem with the ETFs I have been trading. However , you can look at the individual issue that you are trading and adjust from there. For example, a stock may tend to reverse at an RSI of 40 rather than the ‘by the book’ 30...I did this for a while with Amazon. Another idea I have been thinking about doing myself is to buy or sell the initial amounts based only on AIM and then delay the second purchase/sell until the RSI confirmation. This would allow you to take advantage of smaller movements.
Adam,
The way I do it is I use the RSI to decide the entry points..if the Wilders RSI hits 30 or 70 (oversold or over bought) I enter the data into AIM at that point..AIM decides how much etc. If it remains in an overbought or oversold situation I just go with the AIM recommendations. This will often mean ignoring the earliest sell or buy advice. For me this has resulted in my first purchases or sells being larger and at either a steeper decline or advance. This approach has been particularly effective with high volatility shares .
Yes very familiar with MACD and use it sometimes as well.. I just prefer the Wilder’s RSI since it does not whip saw as much and seems to go off a little earlier than the MACD.
RC
Tom has answered the Aim aspect of why increasing the trading range would not increase the buy volume. The reason I use my approach is it does a very good job of calling local tops and bottoms for AIM buys/sells. AIM itself decides how much.. the RSI just helps for the when to act portion which results in fewer but larger trades. Lots of ways will work.
You might want to take a look at Wilders RSI as a market timing/AIM buying augmentation measure. It essentially predicts when a stock is over sold or bought... I use it with the triple leveraged stuff as it tends to prevent the smaller buys and sells in favor of larger ones....this takes more advantage of the inherent volatility. Use the AIM calculations for the number of shares....good luck.
Tom, thanks a ton. This is very helpful
Tom, thanks ! That was very helpful and it would be interested to see a comparison.
Tom
I have been following AIM and this board for a while but never posted. I looked at your web link..how does the MRI differ from the V-wave?