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Re: Adam post# 37726

Sunday, 05/18/2014 6:54:46 PM

Sunday, May 18, 2014 6:54:46 PM

Post# of 47132
Adam,

On the Ocroft Method you wrote:

"Check on the stock once per month and if AIM tells you to buy, you instead show on your spreadsheet a virtual buy but you don't actually execute it with your broker. You keep doing this until the spreadsheet show no more buys. At this point the presumption is the stock has stopped falling and you're free to execute your buys. The idea is that you prevent buying a falling stock and only buy it when it starts its recovery.

In my experience when I've used this method on a few stocks I've missed the buys when the stock declined, and then when the stock recovered a bit it went back into a hold zone, so AIM ended up doing nothing. There is particular stock price pattern where his method works well, and if it does not follow that pattern the filter just ends up poisoning the AIM mechanism.
"

As I remember it is was so that the Suggested AIM Buys on the way down were NOT Entered in the AIM Algorithm as Virtual Buys, but as the price dropped the AIM simply is increasing the Advised Buy Amount because [(PC-V)-sV] keeps increasing, and at the Recovery Point there is a Large Level Buy Advice (A Buy = > Reserve). In this process V gets smaller but the PC remains the same. . . causing the large Buy.

If at each step the Buy Advice is executed virtually in AIM the V is increased in value but the PC is increased by 1/2 that amount so that the Total Buy Accumulated Buy Amount is less than the Total Advice via the Method of NOT executing the buy in AIM. If the PC is not updated and no Buy is executed then, as far I can model that in my head, would result in a greater Total Buy Advice at the Recovery point than if the Buys had been entered into AIM.

Essentially the Reserve Depletion would not occur either way as no equity is bought. The differences would come into play only when the Recovery would come before the Reserve is depleted. The Ocroft Buy would be larger than the Advised AIM Buy. So at the Recovery Point Ocroft would invest more money than regular AIM at the Bottom Price AND Ocroft has an advantage on AIM at that point. Also Ocroft would sell All the Equity at a 20+ % Profit Level, while the AIMer would start selling smaller packages at say a 10% price rise. . . .Ocroft would ignore the AIM Method for selling.

Ocroft did not care that at that point the AIM Algorithm on the price rise would get messed up by his Method. . .He would sell everything if his profit reached 20 % or more smile


Conrad Winkelman
What is Vortex AIMing? Look for my Vortex Discussion Forum:
http://investorshub.advfn.com/boards/board.asp?board_id=1341

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