Replies to post #27305 on A.I.M. Users Bulletin Board (AIMUSERS)

[The Grabber]

Re: TA

Hi Neil.

lost my faith in all these technical analysis indicators when I began testing them and found that they are no better at predicting price than a simple toss of a coin.

I agree in general. However, TA is more of a trader's tool. Not to predict price, but rather trend or directional change. Traders live and die on this stuff!

I must say that the W%r is pretty reliable in that regard. It is why I included that line from the pdf. So much so that I would probably use it as confirmation flag to execute a Stop Loss strategy. Of course much testing would need to occur.

[ls7550]

Hi Neil

I lost my faith in all these technical analysis indicators when I began testing them and found that they are no better at predicting price than a simple toss of a coin.

Exact same for myself.

Came to the conclusion that just simple time spacing or trading only whenever the iWave/vWave moved by a certain amount was just as good an 'indicator'.

I am now leaning to a more fundamental analysis side of the fence after all, one of Buffets sayings about stocks " In the short term they are a voting machine, in the long term they are a weighing machine" applies.

So, you can AIM a stock that has no income and is burning through cash but the stock price is rising on expectation and speculation.

The money collects in your account as you sell out, but when expectations are not met and the price slides you end up giving all your profits back to a stock that essentially has no value.

The choice of stock based on fundamentals should be utmost in mind, not just selecting stock purely based on its historical price volatility waveform.

AIM's volatility capture benefits are relatively small, 2.5% of total allocation (5% of stock value and assuming 50/50 average stock/cash), 30% gain = 0.75%, maybe with an average of two buy/sell cycles per year (1.5% of the total allocation value benefit) if you're lucky.

That can easily be overpowered with price appreciation and/or larger scale cycle benefits capture such as from tracking vWave

Regards. Clive