Replies to post #1262 on A.I.M. Users Bulletin Board (AIMUSERS)

[Qarel]

I have followed this discussion with some interest, as I find the Vortex method intriguing. Barry has shown a mathematical difference between the methods that is real. Conrad claims the methods are mathematically equivalent, but they are only equivalent in intent.

Take the two equations [1] S * (pc-y) (Conrad) and [2] pc - y * (1+s) (Lichello). It is clear that [1] can only be negative with y > pc, while [2] can still be negative when y < pc, or, put differently, only becomes negative when y > pc * (1+s). Obviously, a harmonization of these cases would require the equality pc = pc * (1+s), which requires s=0, or zero safe.

But more interesting than the differences would be the respective behaviors, IMO! Perhaps we could study that?

Regards,

karel

[Conrad]

Hi Barry,
I am running a little behind...(If you miss two days there 100+ messages to read)

I think smething isgone wrong in the text someplace. The idea tis this:

The Lichello Buy Advice =(pc-y)
If the SAFE is(as a fraction) s then the BuySell Order is modified by a factor(1+s) and that can be a reduction or an increase(your choice, depending on how you define the SAFE). The point that you state pc-y*(1+s) makes no difference for it has the ultimate effect that it still produces a fractional change on the Buy/Sell Advice as pc-y*C1 = (pc-y)*C2. For any given C1 or C2 the other unkown will be found.


This is the conclusion:
The form of the Lichello Buy/Sell Order is simply a linear proportion of the Buy/Sell Advice. Hence Lichello Order = (pc-y)*S and you can define the "S" from the SAFE any way you like. That being the case my conclusion was that the Vortex form of the Order was identical with F*(pc-y). The only difference in the use of my F*(pc-y) is that I calculate it from an aggression factor instead of from the SAFE. I use a Buy/Sell Resistance in the way Lichello uses the SAFE in order to revent buying or selling too soon. The use of F*(pc-y) simply allows me to make the Orders as big or as small as I want it, and buys and sells can obviously be made different as well.

I think this will clarify it.

Conrad