Replies to post #33977 on A.I.M. Users Bulletin Board (AIMUSERS)

[The Grabber]

Hiya Toof

There are some modifications that need to be made to make LD-AIM work properly.
1) Make SAFE 5% instead of 10%
2) Make MIN TRADE SIZE 10% instead of 5%

The above spreads out the selling so you run out of shares slower.

With all due respect, I disagree. What is 'proper' for one is not necessarily 'proper' for another.

That's not to say I disagree specifically with your approach. Rather, I wouldn't want anyone to think that it is the only 'proper' way. In fact, your approach would/could work just as well with Classic AIM as LD-AIM.

Besides, my experience with LD-AIM has been such that I rarely 'sell out'; fast or slow.

In fact, as I've been preaching out here for 8 years, LD-AIM is exactly like regular AIM with the only exception being that some part of your initial Buy is 'Virtual'. Otherwise everything else is identical.

For the life of me, I just don't understand why that is confusing to anyone. So, see my next post. Hopefully a picture will be worth a thousand words.

[Conrad]

LessFussy is your name from now on!

On the LD AIM your explained a few things to me that made me understand it to some degree.

You are adding a few guidelines for LD-AIM that in your opinion would make it work better. . . OK the exact details are not so important to me. . . I suspect that by tweaking the variable SAFE’s you can get LD-AIM "tuned" to what in your eyes may be effective for you. Something similar can be, and is done, with standard AIM( I call it SAFE -Tweaking) to make it respond different from Standard AIM.

So what I conclude from all this is that by using "virtual shares"
one simply alters various "parameters" so that you get:

Buy= (PC-V)*A. . . Relative to the Standard AIM
Sell=(V-PC)*B . . Relative to the Standard AIM

and you tweak the parameters till the values of A and B are approximately as you want them to be. If that is approximately a correct interpretation of LD-AIM then instead of using virtual shares you could just as well use some trade aggression factors relative to Standard AIM like this:

Buy=(PC-a*V) = (PC-V)*A
Sell=(b*V-PC) = (V-PC)*B

In this case the application of a simple aggression factor applied to the Equity Valve would have the same effect, for example you can represent it also like this:

Buy=(c*PC-V) = (PC-V)*A
Sell=(V-d*PC) = (V-PC)*B

Mathematically you can calculate the values of a,b,c,d as long as you know what you want the values of the “multipliers” A and B to be.

I am not saying that these alternative ways of calculating the trades will give the same result over a range of equity prices but what it means to me is that LD-AIM is one of the options one can use to increase or decrease the trade sizes in a particular way, relative to Standard AIM so that the Trade Advice to price changes is more in line with what an investor would want for a "particular portfolio", and by adjusting the parameters a,b, (or c,d or A,B,) in the options above the overall response will be "better" than Standard AIM would be in that case. . . This sounds like a logical conclusion.

In all this I presume does the PC updating us usual:

PC2=PC1 + 0,5*Buy. . . (for a Buy only, as it is done for Standard AIM)

or are you also using a variable there to get a more flexible PC-update form for LD-AM

PC2=PC1 + x1*Buy
PC2=PC1 - x2*Sell

This would give a great flexibility to LD-AIM and it would in my view be a very effective system in which you can tune the systems for various types of equity behaviours. . .if you wanted to do that.

[ls7550]

Hi Toofuzzy

...The above preserves cash and in fact keeps each BUY the same Dollar amount. Share amount purchased will still increase due to lower prices.

I thought you were one of the few who sold put options for the extra income that generates. Doesn't conventional AIM's use of minimum trade size of percentage stock value result in a fixed capital amount traded at each trade, whilst with MTS = percentage of portfolio control a fixed number of shares is traded.

Had you down as a %PC'er not a %SV'er.

Next AIM sell price 105, current price below that, write (sell) 105 strike price PUT options and keep the premium no matter if the sell price is hit or not.