A.I.M. Users Bulletin Board

[Conrad]

Adam, the general idea of adapting the trading strategy in response to market behaviour has always been a principal advice of mine(Active Management Overlay on the Aiming Basics). When one sees the prices go into a trading range(TR) it is logical to adapt the settings. In regards to the relation to Holding Zone and Safes in Regular AIM I venture not to say too much. . . the effect of not updating the PC on selling and the effect of the Residual Buy when the price reverses at the bottom of the TR makes the standard AIM rather asymmetric and for me a bit unfathomable(due to not having studied it to death).

As I see interpret I your statement: Making the Holding Zones smaller alone would force more frequent trading within the TR but in order to make there trade advice larger the Safes should be made very small or zero. This would work if there is a lot of up/down movement but the trading cost may be too high for the small trades. . .works for very low cost trading fees.

I would look at it this way rather:
Make the Holding Zone to match say 80-90 % the TR upper and Lower Limits(not necessarily smaller!) and reduce the Safes to increase the Trade Size. This way you realise maximum profit creaming. Then if the price breaks out of the TR you need to adapt again. . .not executing Buys as the price keeps dropping and selling a bit at the time as the price keeps rising(or not selling at all if you are confident on the rising trend, not waiting too long though). This requires abandoning the strategy to only to look at the prices once a month and keep a sharp eye on the "stuff" you bought. . .always being prepared to shift strategy “with the flow”. It requires more time and skill for management though.