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Thursday, 02/03/2005 9:40:19 PM

Thursday, February 03, 2005 9:40:19 PM

Post# of 48301
Everyone.

Lately I have been playing music and doing other things as well as testing my different approaches to the market and so I've been quite busy. In the mean time I have come to the conclusion that good old AIM is the best overall. I still do like Free Shares, DDCA and PPXO just fine but in the long run AIM is probably the best. overall.
BTW, I can not trade using charts or any timing methods {like PPXO). I have found out the hard way (through trial and error) that I do not have the temperament for it. That is why AIM or DDCA are the best for me. Right now I am using DDCA and employing a new technique to determine how much to buy and sell based on volatility. It's all quite new and I have only been testing and using it for the last 2 Months.
It works quite well and I wanted to share it with all of you. This is how it's done:

For a 6 Mo. period I find the high and low price (Using a chart). This then is the Range.
I then divide the range by 6 to get a 6th part of it.
I then find the mean of the range (by adding the high and low and divide that by 2).
Next I divide the 1/6th part by the mean price.
This then gives me a number that is a percentage. I use this percentage for the trading range for DDCA PPTM. Simple!
In other words if the percentage is 7% (+/-7%) I use this as my min up or down move to buy or sell. It does work quite well because the swings are well suited to the price range for the 6 Mo. period. The 6 Mo. period is updated when ever a traansaction takes place.

Now, here is the deal; I would think that if I were to take that % and apply it to the "SAFE" in AIM instead of a fixed 10% as in the standard form of AIM it might just work.
If the %. were 7 then my safe would be 7% of the stock value or if it were 17% then of course a much larger safe would logically be called for and that would make sense because a wild stock would call for a larger safe. A blue chip might be only 3% and so a small safe would be in order.
With a normal safe being 10% I have found that 10% doesn't always work well in all situations.

If anybody would like to test this feel free. I do not have much time to do so. It does stand to reason that a smaller safe for a stodgy Blue Chip compared to a bigger safe for a more volatile issue like SIRI for example would make sense.

If this would work I would perhaps like to do AIM rather than DDCA. In my mind it seems to be a good idea but testing will be the judge!

Just some food for thought.

Jibes
TrendSeekers at:
http://homepage.mac.com/bondiblueone/trendseeker/index.html
Please, come hear my music:
http://www.icompositions.com/auditorium/showphoto.php?photo=2973&password=&sort=1&cat=al....

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