OK Harlan, read on!
I think we can meet in the middle at the point "We leave it at that". Considering that we agree that with selling 100% of the investment would be ideal(especially if we could hit these trades on the very top or the very bottom), there will certainly be an operating range for which the MIA technique would remain profitable as the trades will migrate towards stepwise (Reciprocal) buys and sells.
Your last point is perhaps most important if you mean by "not linear" the same as "not symmetric". In the Standard AIM it is also necessary to make the buys and sells asymmetric, or else no profits are made. After this remark of yours I did take a closer look and considered your proposition by constructing price cycle and tried to construct a Buy-Sell methodology that would end up profitable in a Horizontal Trading Range. I must eat my earlier words: It is possible, but I conclude also on fundamental grounds that it is not efficient from the point of view of Portfolio Growth Potential,
but it does have a redeeming advantage as well: On divers that do not recover there is a good measure of protection against investment loss, by virtue of the stoploss feature the MIA Technique has. In this sense the idea is worth developing, but I would definitely argue that with the MIA Technique one should AIM for making the Buys as the Sells as large as possible! Possibly then, there might be an optimum that would do (in the long run)better than selling 100%, as with this there are definite loses on the Top Reversal.
Interesting indeed! It may be something for investors that feel very uneasy with buying on the way down, but one needs to figure out how to consistently make sure the intended asymmetry remains large enough to ensure profitability.
Regards,
Conrad
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