Conrad,
I frequent the AIM-users board on occassion. I'm the one that started the recent discussion regarding inverse pairs trading using AIM on that board. I am posting here because of your apparent interest in this process, more so than the others.
I am not as technically inclined, nor as knowledgable about the stock market, as you or others, but I do have my own AIM excel spreadsheet using the Lichello method.
Ihave decided to go ahead and start a new AIM portfolio using QQQQ as the "stock" and PSQ and cash as the "cash." This inverse pair seems to me to be the best for AIM, but I am open to suggestions.
The portfolio breakdown is as follows: 54% in QQQQ (using V-Wave suggestion), 38 1/3% PSQ and 7 2/3% cash. The true cash portion is 20% of PSQ and will be used solely to rebalance the PSQ when it veers away from the true inverse price of QQQQ. This percentage is somewhat arbitrary, but in a cursory review of past performance it appears adequate to more than cover the most extreme divergence. I would prefer a smaller percentage and I may lower it, if I can prove that's feasible. I don't want the true cash portion to dry up. I don't see PSQ drying up because of it's inverse nature.
I plan to update every week, because I think that will generate more trades. That may change to every other week. Movement in and out of QQQQ will be determined by AIM's market order. 80% of sell order amounts will go to PSQ and 20% to cash.
I think this idea has potential. I really like the idea that you are protected in a down market. And I'm not completely sold on the feeling that returns will be less than regular AIM. I think it may be just the opposite. Maybe I'm a dreamer, but hey that's me.
I would like your input about my plan. I am also curious about VORTEX AIM. If it can outperform original AIM, I'm very interested. I just don't see how. I tried to download your free trial but could not. I have windows XP so it should work.
I hope to hear from you.
Sam
AI
