Hi Gang, I had a thought about AIM and market direction. Currently AIM is not set up to work differently when the market is going up versus when the market is vacillating in either a top or bottom of market range or when the market is diving.
It occurred to me that in a down trending market one would want to set BUY SAFE higher so that it would take more of a drop before you were given a signal to buy more for your position and the opposite when the market was on an up swing.
Tom has suggest that the SELL SAFE be set at 0%, the BUY SAFE at 10% and that seems to work because we are in a still swinging up market. The drops in an up market are mostly low so this means that the number of buy signals will be relatively few but the sell signals will be a few more overall.
This is with a 10% share buy/sell quantity
In a overall down market there will be a fewer upswings compared to downswings so maybe raising the BUY SAFE to 15% or 20% might make sense, but only in a down market otherwise one would never get a buy in an up market and after a while one would be trading on a few stocks for relatively few dollars because you were not replenishing your positions.
Thinking about this led me to the idea of reducing the buy/sell percentage during a sideways market. With a narrow range reducing this seems to increase overall activity. However, there is a potential problem with this if the position size is big enough, the dollar total is small enough that by the time one knocks out the cost of the shares in a sell, the percentage that is the commission cost swings way up, eating into any profits, so, I guess that one can only do this with rather large positions.
Does all this make sense?
