A.I.M. Users Bulletin Board

[Conrad]

Hi TooFuzzy, you make some valid remarks. I shall respond to them one by one:

1) There is an issue of data mining and 20-20 hindsight involved.
2) Why you wanted the first trade to be the same was and is beyond me.
3) How do you decide on your settings on a new investment?

1/ Indeed. This was simply done to illustrate a method to increase the Vortex trade aggression to more or less match the trading response to the AIM trading as in this comparative testing the Vortex aggressively was reduced significantly due to the matching of the initial response. It really means that setting the initial responses identical the two systems the responses are diverging but by matching the overall response giving approximately the same results one can conclude that both systems can be effective investment “managers”.

If for some reason it would be necessary that AIM and Vortex have to be compared (rigorously) it would have to be done so that for a certain price behaviors AIM and Vortex would use the most effective parameter settings for their system. . .such knowledge can only be obtained from experience and comparing as I have done. It is possible to gain extra knowledge from this sort of work. .one's nose is pressed on the facts that are revealed by the testing.

2/First trades the same: The idea was to find out how AIM and Vortex are fundamentally different or similar. One way of finding out is to start out as I did with identical responses to price changes. I had expected that AIM and Vortex would react more similarly but it surprised me that the divergence was quite large and studying this divergence gives me a strong insight as to how different AIM and Vortex are and why. Before this I was not able to fully grasp the essence of the difference. The results from our testing gives me a better understanding of both Vortex and AIM and in this respect I have learned already lot from this single test.

3/ Typically I seek high volatility funds but also one’s that give me a lot of certainty that they will survive big dips. . . funds that will not easily disappear. I then start out with a generally aggressive buy-methodology and a less aggressive sell-methodology. This on the basis that it will make strong buys and a weak sells. This spends the cash quickly but holds on to shares longer to let them appreciate. . .this works well with "well" behaved funds. For "badly" behaving funds one must fly with the seat of his pants and be able to bail out before it is too late. . . This is especially important for any system that buys on the way down. I might add that 8 tears ago I have been financially beaten into the dirt and I am not actively investing anymore. . .I follow my own advice that I give to others: Do not invest money you can not afford to lose.

4) I think a farer test would be for you to pick settings base on whatever past info you usually use (for a company and industry you are not familiar with) and for AIM to use the typical settings and then use a price list for some period going forward from where you stopped looking.

4/This is indeed what the testing demonstrates and I have alluded to this above. From this test I understand Vortex better and it performs in line with the intentions I had when I created the Aggression Factors. It will for example be possible to create an investment that systematically liquidates the shares over time. . .for someone that needs a "steady" income from his investment. If then a dip occurs he can again make a strong buy and on recovery starts selling shares on the normal ups and downs until the investment is too small to keep trading.