Thanks LC,
In regards to the Triggers to allocate some cash to shares, do you , beyond using this trigger point, vary the amount of the cash that will be allocated to shares?
This idea of a trigger I have, naturally, also in the Vortex PremiVest Lay Away Plan. One needs a bit of a dead zone to prevent buying very small amounts of shares. In Vortex I use a formulation of the Vortex Trade Formula but I do not use any standard Indicators. This results in a progressive cash allocation to shares for dropping prices which at some point becomes 100% of the Periodic Lay Away. At this point the PremiVest Investor can obviously start using some margin if he chooses to do so. On the price rise side the allocation to shares drops, then goes to zero at Dead Zone Limit before the allocation amount reaches zero. As prices keep rising the trade advice changes to selling shares in parcels while all the time the Periodic Lay Away is added as cash as well.
I wonder to what extend there are similarities in your H/L system and PremiVest. In some way I would consider the point in Premivest where the Advice = 100% of the Cash Lay Away, a Low Limit, and the point at which the share allocation switches from buying to selling a High Limit.
I have not yet programmed a Sudden Death Bail Out into the system for when the profit has reached a defined point, or a if the price fall through a bottom. This type of Overlay System seems more difficult to standardize. For that market signals would be used, but I have not bothered to formulate something like that yet. I doubt if I will. For the moment my advice on the Bail Out is that one needs to use his own judgment for securing his profit or preventing losses.
On the China Equity Fund my Stop Loss Bail Out backfired on me in the Demo Portfolio. Since the Bail Out the China Fund has gone straight back up! On May 28 the fund went up again 4% or so, representing a recovery of more than 15 % in a few weeks. Anyway, on the 10% of the shares I left I did get that 15% increase!
Some times I AIM a lot, sometimes I AIM only a little.
Regards,
AI
