Replies to post #37783 on A.I.M. Users Bulletin Board (AIMUSERS)

[lrp42]

Hi Conrad,

"Could anybody give me a hint on the dates Ocroft disclosed his Methotd to the AIM Board?"

I did a search and found what appears to be Ocroft's initial post. It is Post #31565. It was posted March 22, 2010.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=48120947

I have read the post several times and I think I got an understanding of what he was trying to say. It appears he would synthetically follow a stock which was declining in price. It would appear he would synthetically apply the AIM formula with the declining stock price until the Portfolio Control ceased rising. At that point he would make his initial purchase. However I could be wrong on that point.

In his message he says,

"I just discovered this Aim user site. i would like to share this observation with the users of AIM.
I have observed that in the AIM universe,on the buy side, it is better to buy the stock; not as the price is falling,but when the portfolio control stops changing or rising.
They are an inverse process. When the PC is changing or rising, the price is falling.
When the PC stops changing or rising, the has stop falling.
AT the point the PC stops changing, you enter and buy the same amount that the by the book AIMER bought.
I would say 90 percent of the time , you always will purchase more shares.
The best part is that you are not in the way of a falling market."

Conrad, I hope this helps you find what you were looking for.

Regards,

Ray

[Adam]

Hi Conrad, The 20% rule, where you sell all your shares when you have a 20% profit I read about in How to Make Money in Stocks by William J. O'Neil. In this book he describes a method of choosing strong stocks on an uptrend and placing a stop-loss of 8%. It's essentially a method of momentum trading. In AIM we don't have a stop loss and these can be much bigger than 8%. So if you limit your gains by 20% and allow much larger losses I don't see how the method can work.

[ocroft]

HI Conrad,

Ray posted my first post which describes the way in which I use the aim method.
What my first post was trying to convey to aimers was that through observation, the accumulation of shares shoud not be made while the stock is in an aim downtrend move as suggested by the aim method; It is more profitable if aimers wait for what I termed an aim uptrend move.
An aim uptrend move is defined as an upward move in the stock that is strong enough to cause the market order column to read zero buys.
Initially I said stop the PC from rising. Same effect. The stock will have ceased its aim downtrend and started what I
coined an aim uptrend move. The point at which action in the stock should begin.

PROS:
Save on commission.
Will accumulate the shares at a similalr or lower price on recovery.
Will avoid a falling knife which will preserve your cash reserve.
Can be used for a lower initial entry price into a position. Aim advises any price can be an initial entry. Using this method for FTF entries will produce some great rewards.

CONS:
Can't think of a scenario where the regular aim method will outperform the aim uptrend accumlation method. Even if a stock goes to zero, It can only be a tie.
Even then, I don't believe that a stock that is really going to zero would have enough momentum to make enough aim uptrends moves to absorb the aim uptrend method cash reserve.

Note. The reason I don't discuss the sale side is because it is
not based 100 percent on the aim method. My sale method is a form
of profit capture plus the compound effect.
My initial entry price will really determine how I will handle the sale side.

My buy side is based 100 percent on the aim method.


ocroft