Hallo Adam, I have no disagreement with your point of view in this that you are comfortable with ignoring a system output of a machine that is supposed to advise you. Of course you can compensate for a wrong advice if you know the output error. If a machine I designed does not give the output that I want it to give then I say that it has a defect and I would redesign it so that it does what I specified it to do. You want to call the Residual Buy Signal a feature while others want to call it a flaw, and that was also the consensus many years ago when the topic was discussed in depth.
It's similar to having a crack in a wooden table. . .the crack could be a feature of the tree before it was cut or it could have developed later. The fact is that some people would not expect their table to have a crack if they want a table without one. Even if it is feature they still will call it a flaw and if they get a table with a crack they will reject it. A point I have made years ago is that in Lichello's book, which I have read quite intensively in order to grasp the fundamentals of AIM, Lichello did not point out this feature in any clarity. If he had intentionally designed this feature then no doubt he would have elaborately pointed this out and would have put this on the foreground with examples, as he did for the main issues of AIM. . .even to a fault, he stretched out the chapters of his book that describes the path that led him eventually to AIM, to give the book some volume.
I have argued that without a "flaw" and to get a Zero Trade signal after any trade such a trading system is quite a logical instrument. . .After one buys 2 kg of apples it makes no sense to automatically buy another 1 kg and then 1/2 kg at the same price. . .even if there are no extra costs involved.
Also one can limit his buys to any desired level of risk limitation by adjusting the trade sizes and then buy extra shares later. . even at the same price if one wants to do so while again getting a zero advice after such an extra trade. So the essence of my argument is not that one can ignore the residual buy advise but that a Residual Buy is an illogical part of a system that is supposedly intended to take the emotion. . .(read also "judgment". . . out of investing by way of Automatic Investment Management system. . . which Lichello and others after him loved to call an Engine. . and the usual advice from AIMers to new AIMers is: "Just Follow the AIM System, don't monkey around with it". Why then ignore Trade Advice output?
Well, ignoring an output of an Automatic Management System does not appear to be a very logical procedure. It follows that, if you feel comfortable by ignoring the output of a “Advice Machine” that is designed to give proper Trade Advice you might as well ignore any Trade Advice that your system gives and just invest on the basis of other skills and gut feeling. Moreover if AIMers generally agree that the Residual Buy should be ignored then one might as well modify the AIM algorithm to set the Trade Advice to 0 after each trade. To make derivatives of AIM, or make improvements to AIM is certainly not something that I alone have done. More than that, a great deal of time and effort is demonstrably spend by AIMers to search continually for improvements/adaptations. In this light it remains a mystery to me why there this persistent aversion Among AIM users remove that "Feature" of AIM that is demonstrably a Flaw from the point of view that an automatic trading system should be one that gives optimum trade advice.
In this light I say that if you ignore the Residual Buy then it MEANS that The Advice after a trade for that moment should be 0. If after 1 day or after 6 months the price is again the same (it could have been very different in between------> missed buy opportunities or missed sell opportunities) then The Advice should be zero again. If then you decide that, on account of all sorts of external factors, you are convinced it is wise to buy more shares or to sell some, then there is no reason you can not buy or sell extra shares. This is the "Overlay Management" you as an investor should be doing all the time anyway. Even with standard AIM it is very simple to build in a "Feature" that sets the Buy Advice to zero after a trade. If then the price remains the same you can as always decide to buy more shares later. . .but then you do that for good reasons from the market signals or fbecause of an analysis you have done. Structurally ignoring a system output when this output should be zero is what I call a FLAW, any which way I look at it. . .any machine that does not do what it is designed to do is flawed and should be repaired or redesigned.
That people can use and cope with machines that are flawed is nothing new, but usually they prefer one that works as intended.
