A.I.M. Users Bulletin Board

[Qarel]

Conrad, in message 1214 you wrote: The important thing I wanted to convey was that my method is not substantially different than the Licehllo Method in its mathematical form.

If you now claim that that was not the focus of the discussion, I am only too ready to agree, because
a) it is not correct
b) it detracts from the value of the Vortex method

In fact the differences you note between the methods are caused precisely by the mathematical differences, which therefore have to be substantial, otherwise we would see no differences. A simple graph illustrates the differences, and explains my statement that 'your' S is a scaling factor and Lichello's s(afe) is a translation factor. I take note of you intention that you want the advice (order?) to be the same at the border of the hold zone/dead zone.

 
 V   L               /               L   V     
     V L             /             L V     
         *           /           *         
           L V       /       V L           
             L   V   /   V   L             
 --------------L-----V-----L-------------- 
                 L   /   L                 
                   L / L                   
                     L                     
                     /                     
 

Lichello's 1+s or 1-s moves the buy or sell lines to left and to the right; a translation. Your S influences the slope of the line; a scale factor. When you want your V(ortex) line to intersect with the L(ichello) line, you have to choose a less steep slope, which explains the behavior you note:
- Past the intersection point, V sells/buys slower
- At the intersection point, V and L buy/sell identically
- Before the intersection point, V sells/buys faster (in your example, this falls in the dead zone)

The value of this method should be backtested, but your general conclusions seem correct.

And as a furhter note, what Lichello calls a Portfolio Control in Vortex becomes a Buy Control, in my opinion. It no longer controls the portfolio.

Regards,

Karel