Hi Barry, On Tangent 2,
I find the representation a bit difficult to follow because of the different symbols you are using.
Anyway,
You point out that the Hold Zone for the Lichello AIM is not symmetric. That is not in principle so, except that the use of certain calculations makes it so. It is not a necessary condition. With some simple adaptation you can make it symmetric without loss of functionality.
Your example of calculating the value of Tangent Sell does in my opinion only eliminate the Sell Order but not the Sell Signal.
You write:
First we see that F/(1-S) gives 10,000 and M is greater so that we do indeed have a sale.
Either using the above formula or the SA approach (i.e. sell advice plus safe adjustment) we find that
X = 1,800
N = M - X = 12,000 - 1,800 = 10,200 which implies another sale
But 1/(1-S) = 10/9 in SA ... thus
Y = X * 10/9 = 2,000
and
M - Y = 12,000 - 2,000 = 10,000 which implies no sale.
So, with F at 9000 you still have (9000-10000)=-1000 Sell Signal, but because this lies within the Lichello Sell Band you conclude that there is no Sell Order. OK. That may be true. But this is also true for the Lichello case, is it not?
For Lichello the Sell Signal is (F-M) and the Sell Order is made a little smaller by the SAFE. If you then execute the Sell the next Sell Order is smaller than the original, and lies under the 10 % SAFE Limit.
So, we can conclude that for Selling there is essentially no difference between the Tangent Method and the Lichello Method?
Conrad
