A.I.M. Users Bulletin Board

[Conrad]

Clive, TooFuzzy, Anybody, I have gone back to the Vortex results for the run that you did with the 3500 Min Trade. This was originally suggested by Adam, but TooFuzzy considered that far to large and suggested 5% of the SV. This 5% gave some problems for TF's AIM to generate a SELL at a price rise to 29,25 that I used for setting the Sell Aggression for Vortex. In order to solve that TF and I agreed to make some small changes and use Min Trade of 4,5%SV so that we had identical start positions.

In principle the latest run with the 4,5%SV Min. Trade give generically similar results but allowed Vortex to make more trades as the 3500 is severely limiting trading.

The run with the 3500 Min Trade resulted in the following interesting Remarks & observations

1. For an identical "kick-off" for AIM and Vortex for buying and selling Vortex has to be turned down severely and be made conservative. . .watch and do noting . . . Normally I would trade much more aggressively than buying only 176 shares for the price drop from 25 to 21,5. This turning down of the Vortex aggressively severely limited the trading activity and I could not get rid of the cash as the price dropped to 13! I had +26000 in cash but the Buy Advice stayed below 3500. In this way there is already a big difference between Vortex and AIM. . .in any much more than I had expected.

With the first Buy & Sell as Kick-Off Reference AIM starts buying more aggressively than Vortex so that AIM invests the cash more effectively while Vortex waits till the price drops more, due to the very conservative settings.

This shows that the 3500 Min Trade is far to large for Vortex at this conservative parameter setting.
Also the way AIM updates the PC creates a larger difference for (PC-SV) so that AIM Trade Advice exceeds the 3500 limit easily. The Vortex PC=60200 at the price of 21,5 while for AIM the PC is updated to 71892. With SV=59520 at a price of 20 the Vortex Advice is:

Trade=0,3857*(60200-59520)= 262 < 3500 ----> No Trade. . .this 0,3857 multiplier is dictated by the first Buy of 176 shares and is obviously to low.

The AIM Advice with a 10% SAFE is:

Trade=(71892-59520) - 595= 11777 >3500 ----> Buy 11777/20= 589 Shares.

???? What went wrong here?

You show a Buy @ 20 of 321 Shares on you data table. . . I do not understand this!

2. Apart from the Min. Trade of 3500 being too low for Vortex it is clear that the low aggressively of Vortex creates less buys and cash is ineffectively reserved. In order for Vortex to increase the buying action it is necessary to increase the aggression factors for buying and by doing so it will violate the criteria for this test: to start out identically in response to a price change from the 25 price to the 21,5 price.

3. As the price recovers from 13 AIM starts selling more aggressively than Vortex. This would, at these setting, be a good thing for Vortex. . .holding on to shares longer as the rise in value. . . but this only compensates the low buying on the way down a bit. If I would use a higher aggression on the way down AIM and Vortex would respond more similarly but a low Sell Aggressively would hold on to high value shares. As it is Vortex is not functioning well at all with the non-aggressive buying.

3. At the end position AIM and Vortex have practically the same number of shares (AIM 2466/Vortex 2405) but AIM has a 28000 more portfolio value(191000) that Vortex(163000). This is quite reasonable as Vortex hardly used it’s cash.

In the light of these results I must conclude that because of the much more aggressive response of AIM to a price drop after the first trade AIM and Vortex can not effectively be compared by setting the first trade responses identical.

After some trial and error it would be possible that AIM and Vortex create more or less similar average trades on the way down and on the way up but in practice this would not normally occur. . .AIM-users and Vortex-users would start out with settings that will be dictated by experience and insight in the specific mechanisms of each system. Typically I use a high buy-aggression and a low sell-aggression. This would take advantage of dips and tends to hold on to shares as the appreciate in value.

Provisional Conclusion

Comparing AIM and Vortex on the basis of an identical Initial Response to a + or - price change serves no purpose other than discovering the essential feature as to why AIM and Vortex are essentially very different. . .mostly because of the very different ways the PC-update is executed.

From this it becomes very clear that because of making AIM and Vortex respond identically initially that this specifically makes them function quite different over a whole data set. In this light it may even be no longer necessary to run other tests and AIM users and Vortex users can not use each others know-how for getting their system to perform better.

After TooFussy completes his Trade List I shall complete my analysis on this testing.