Replies to post #46967 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

Hi Grabber, Re: Minimum Trade Amount (value)....................

Let's say I have my AIM engine set to sell $1000 as a minimum trade at the next target price. Overnight the stock price goes up beyond the target, AIM would say to sell $1200 instead of just $1000. I'd divide the $1200 by 2 and add 600 to Portfolio Control. (not 500, which would be 1/2 the minimum trade order amount)

Generally, a vealie will only raise the "next" buy and sell targets by about 2.5% to 5%, so it doesn't move the Lichello Hold Zone by very much. Over the years in bullish times I'll see the cash max out and then a series of vealies interspersed with some sales. This keeps the cash reserve percentage near what my target level is as the overall engine grows. (The target for common stocks is usually derived from the v-Wave or the SignalPoint Market Risk Indicator. Some income funds I use a fixed maximum cash level, such as 20% or 30%)

In general, vealies have done a nice job for me. Limiting cash buildup during long bullish periods has been productive. The sacrifice is not being as well protected if a Black Swan with diarrhea decides to fly overhead. I also, as part of this strategy, conserve cash on the downside with delayed sequential buying and such. Basically, if you're going to restrict build-up of cash, you also need to be more restrictive and structured in the use of cash in downturns.

Hope this helps,
OAG