A.I.M. Users Bulletin Board

[Conrad]

Clive, Thanks for the explanations.

On the ladder I am a bit Fuzzy. . .no, no, not TooFuzzy, but just a LittleFuzxy.
First, if I take proportional steps from 100 with 5% and I take a ladder with 10 rungs I end op at a 100(1+0.05)^9=155 step size at the top. . .(Ahaa, this is just like compound interest gain, I get it!), and the ladder will look like this

Step\size\Value
0\ 100\ 100
1\ 105\ 205
2\ 110\ 315
3\ 116\ 431
4\ 122\ 553
5\ 128\ 680
6\ 134\ 814
7\ 141\ 955
8\ 148\ 1103
9\ 155\ 1258. . . .Gain is 1158

From this point onwards it got fuzzy. Suppose I am at rung# 0 of the ladder and have no dough left, what will be the action if the price hits 205? What then from am AIM perspective? Is the 205 level the Holding Zone 105/100----> 105% for the next Sell? At the top the HZ would be much smaller: at step# 8 the HZ is 155/1103-----> 14%
My question is: "How much do I sell at each step. . .if I would not want to le the profits run?

On the d'Alembert betting. This is more or less the example I used in my book on my AIM-variant method (to show gambling is a silly game compared to investing in value stocks), and I used it to illustrate that after all the trouble at the Roulette Wheel you end up with only a gain of 1 after one cycle(or at most as you showed) a gain of at most 3 after 3 loses and 3 wins, but less if the loses and gains occur more randomly. I see it this way, if I understood you correctly:

1L=-1
2W=+1 . . What now? What do you bet if you win 3 or 1 ?
1L=0 . . .I conclude 1 base unit, as after a win 1 on the 50/50 cycle you should run with the profit and start again from scratch!
1W=+1 . . Run like hell! Start again with 1
1W=+2. . .Run like hell en start with 1! . . .Right.

Now this way:
1L=-1
2L=-3
4L=-7
8L=-15
16W=+1 . . .
Shit! . . .Still only 1 up and risking loosing 31 when the wife get fed op at the Roulette Table and wants to go shopping instead, then one is down 31 and then the shopping loses start to pile up on top of that! It’s a losing battle!

It is better to bet on pig bellies stock or on FOREX. The chances that base values recover after a loss increasing as the price drops and then with lots of shares accumulated at low prices the profit is substantial! THAT’s a winning strategy. . .as long as you do not bet on an ENRON-type companies. Although I can appreciate . . .of course. . . . that with AIMing and the increased buying at dropping prices the extra stake-method works. . .that is in general the idea of the Vortex strategy with an aggressive Buy Factor, although that might be more like the Martingale strategy. I understand that after a win and starting afresh with a reduced Buy Factor one would "run with the profit" and get back to investing with 1 Base Buying Unit rather than a large stake. It looks indeed like an interesting way to limit loses as an alternative to bailing out at a stop loss too soon.

I think I got your point!

During those years I've attempted every possible extension, including complex charts, predictors and all sorts, but have found no evidence of potential improvements over simple fixed trade points.

On the main then you conclude that all that effort to try to figure out ways to beat the market on ONLY a statistical basis the returns are quite low in relation to the gains? Although if you start out with a Portfolio of a million 4%/year gain is still a gain of 480244 in 10 years. . .that is, if the wife doesn’t start picking away at the gains in the mean time

I do not have that problem!