Replies to post #29882 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Hi Clive

I assume you are not using a stop loss order in conjunction with AIM. That would seem very contraditory to me.

So I assume you ae doing an individual buy and just holding as long as it goes up and then on a pullback sell all.

How do you choose what to buy?

Toofuzzy

[The Grabber]

Re: Stop Loss

Hi Clive

Did you ever bottom out how you'd implement your stops?

Well in my mind's eye at least.

The plan is to incorporate use of the William's %r inside of the AIM process. I would calculate the latest W%r value using maybe the last 4 weeks of daily data. If the value is between the 80 and 20 thresholds, I would not trade. If the value had been running above the 20 level (overbought), I would precalc the downward crossover price to set my Stop Loss Limit Order for all Actual shares. If it triggered it would be a way to establish a virtual short position within the program (mitigating downside risk to capital). This would also provide the cash to possibly 'cover' the short sale reestablishing an Actual position. The shares sold would convert to Virtual thereby maintaining the internals of AIM. The cover decision would also be made via the W%r. Once it crosses from below 80 back up to the middle, I would 'cover' the same # of shares shorted and Buy whatever additional shares AIM tells me to at that price. I expect there would be enough cash from the 'short' sale to fund both.

Keep in mind that this process would be managed inside of the LD-AIM process. Any other AIM settings would also still be used for normal trades. AIM wouldn't know that there's 'hanky-panky' going on with the core position as all it really knows is PC and SV. That is one of the advantages of LD-AIM in my opinion.

I just have not had the time to build the spreadsheet to do this.

Here's a chart on one of my holdings that illustrates the opportunity to employ such a strategy...