Replies to post #15138 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

Hi J, Re: Hold Zone......
Yes, it's the dead zone where we make no trades with AIM.
There's some info on how it works here at
http://www.aim-users.com/aimbrief.htm
If you page down a bit, Santos Torres was kind enough to put together some graphics showing just how the typical AIM trade range or "Hold Zone" is created. I believe it's in the second of his graphics.

Also, there's some common definitions here:
http://www.aim-users.com/diction.htm#q6 which helps us to all be on the same page.

The Hold Zone is a combination of the SAFE values and the relative size of the minimum trade one is using. Using Zig Zags on Stockcharts.com one can approximate the number of "round trips" AIM might make with a certain size hold zone. If one reduces the size of the Zig Zag pattern from a typical 30% for AIM "by the book" to say 20%, you'll usually see quite a few more trades - even though at a lower LIFO profit.

It's easy then to see that if we reduce profits per round trip from 30% to 20% (a 33% reduction) we need to see at least a 33% increase in the number of round trips or we're just short changing ourselves.

Best regards, Tom