Replies to post #38423 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Hi jaiml

With standard settings ld aim broke down for me.( I ran out of cash or sold out of shares quickly, I forget which, and since I want to always own certain investment instead of looking for new ones, that was an issue) It works better with 5% safe and 10% minimum order size. But that will slow down how often you trade. You need a bigger move in the same direction.

So I dont know if it will work better in a sideways market if something sits in the hold zone.

What it does allow you to do is either have larger trades when you get them or for the same amount invested, be more diversified.

Toofuzzy

[The Grabber]

Hi jaiml

It seems to me that LD-AIM beats classic AIM in a sideways, range bound environment and the current market may be the right one for this method. But who knows ...

Actually LD-AIM works just like Classic regardless of the market conditions. The difference (and advantage in my opinion) is that LD-AIM doesn't require you to invest in and hold a larger core position just to set that initial Portfoli Control.
The intuit I had on that point was when I relized that in Lichello's original 10, 8, 5, 4, 5, 8, 10 example, he bought at the 'market top'.
Over the total 6 year timeframe as he cycled through it, he never sold a single share of that original position (on a LIFO basis that is).

So the question I had was if you're never going to sell any (or many in real life) of those initial shares, only buy enough to cover 'x' # of Consecutive Sells with no intervening Buys given whatever settings you use.
So the worksheet allows for you to do that.
Othar than that, LD-AIM is exactly like Classic in how it's managed.

The bottom line is that your return on capital at risk (ROCAR) is much higher with LD-AIM than with Classic (everything else being equal).
The only 'downside' is you can sell out of shares with LD-AIM. With Classic, you can never sell out.

I've been using LD-AIM exclusively for 11+ years now.
I sold out often in the first year or two becasue I only started with setting 3 Sells as I was diversifying across many stocks from the 4 stocks I had been managing with Classic. When I changed that setting to 5, it has been relatively rare for me to sell out. Most of my programs have been running since 2006 and 2007.
With settings of 5 Sells, and then getting them straightaway (again, pretty rare), you would get a minimum of 30% ROCAR off of an LD-AIM program that only has about 50% of your capital at risk. Not bad if you think about it.

I hope that helps explain my original intent with LD-AIM.