A.I.M. Users Bulletin Board

[Conrad]

Clive,

Your commens are on the money!

Ideally you want a constant total fund value such that as one is down (losing), one or more of the others collectively rise (gain) a similar amount to counter that loss such that the total fund value remains much the same overall.

Indeed! Principally the basics I hold on to is that the money can only grow like any other mass-based growth process

M(t)=M0*EXP(rt). . .or something like. . .M(t)=Mo*(1+rn*t)n

And keeping the mass at least constant id crucially important. . .is the essence of AIMing. In regards to Vortex AIMing I even advice that allowing Mo to grow apart from the intended growth from share price after an extended down trend. That this is more risky is obvious but the potential progressive gain is appropriately large.

In regards to the X and the 1/X equities I have considered
1) Aiming both apart in the same portfolio. The Reserve is shared.
A Sell of X would not necessarily be the same size as a corresponding Buy of 1/X. Rge Reserve would cycle up and down and sometimes be used up 100%. It could happen that 1/X becomes rather small in value and it would trigger smaller trades and Reserve would build up. That is OK.

2) Something I have considered doing as an alternative is to carry a small Reserve and simply use the “Price Swing Process”. . similar to the Pressure Swing Process for various gas processing systems. As X triggers a Sell of say value 1000, 1/X may trigger a Buy of value 700. I then would simply execute a Buy of value 1000. . . .accumulating more low priced shares. When the price of X rises above the pint at which 100% of the equity is sold 1/X will trigger a Buy advice. . .Now I can use the Reserve hat will still be an the account.

I have not yet grasped the true implications but essentially it moves the operation towards the TurboVest AIM (investing extra capital after the normal AIM Reserve has been exhausted. The idea here is that the total amount of the Reserve at the start is the limit of the capital the investor can make available. Without having full insight if this is a bertter way of investing it appears a lot better that better than leaving a large amount of cash unused most of the time.

overall produces better rewards than not having rebalanced along the way.

Very pertinent issue. However I see Rebalancing In a bit of a “too fuzzy” way J to see its effect in a feed forward sense. When at any particular point the “function” for determining the CER for a portfolio is addressed one will get the CER for each equity in the portfolio and one could possibly find that there is to much total cash in the pool. Then a Rebalance would be in order and one can either sell of each equities in the correct proportion or invest some cash for each equity in proportion so that all equities have the correct CER. I have no issue with that. I also see that using the Price Swing Sell-Buy for X and 1/X would more often than not create a CER for each equity in the pool that is not ideal. Then again I could lump the equity X and 1/X as a single equity. . .essentially they are already hard-linked and could be treated as a single equity. The fine structure behaviours for such a currency pair escapes me as yet.

I see you are addressing the many “fine structure” responses to price behaviour. I have as yet no grasp on those aspects for comparing currency pairs to stocks. . the variables here become too many for me to fathom. I think it would at this stage be less relevant to me as I want to see how far I can squeeze profit out of the € and $ treating them as I am doing.
Essentially I should compare the linked approach (Sell 100% ----à Buy) to the individually AIMed alternative. Two separate runs. Only then I can compare how this works. I could still use Rebalancing in both cases. . . .for now I will stick with the Price Swing Experiment. This experiment is uberhaupt a crude one. . . When I started only the only thing that was equal was the 20000 total capital for each equity. Then I started with 10000 units of each equity so the starting CER for each equity was quite different. Then I made some trading on the basis of the ladders I used and then I lost track of what I was doing. apart form holding onto the AIM advice then. Still the general action followed the AIM concept. From 23-November onwards I will simply Price Swing the action based on the EUR/USD = X and USD/EUR= 1/X.

The many aspects you consider would apply if one already have several different types of portfolios running based on market features. . .the right type of equity for certain well specified objectives . . .this is way beyond my current focus so I can’t possibly consider these aspects, although I appreciate that you can deal with them appropriately.

Yet another alternative, and the one I personally prefer, is to use a stop loss style

Well, I have also considered that as an alternative to the MACRO Filter. I have looked at the typical TA approaches of some experts here in Holland and it sure makes sense. If an AIMer one is willing to wait for a long down-turn to invest again at a significant price reversal then it maybe more sensible to bail out at 8% or 10% price loss. . especially if you “see” the “dark clouds” appearing on the horizon.

Woaw! I intended this to be a short reply! My short-term memory may get shorter as I go but my “short replies” grow longer as if it was driven by an exponential growth process!

{My Verbiage}(t) = {Your Verbiage}(t)*EXP(at)-------> grows like a nuclear detonation
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One day I am going to put a stop this!
I should have used two pictures instead . . .could have used 2000 words less!