Replies to post #35102 on A.I.M. Users Bulletin Board (AIMUSERS)

[aimdeveloper]

Nice analysis Clive, thank you

[Conrad]

Logical conclusion Clive. . .& Aimdeveloper,

Two investments, both start at a price of $100 and you buy $50,000 of each (500 shares).
. . .
Assuming both stocks revert back to a $100 price, you're holding 1042 shares in total, worth $104,200 and have made a 4.2% capital gain - compared to a buy and holder who would be at +/- 0% gain/loss.

Can I assume you had Both SAFEs at 10% on this?

With Vortex AIM with the Trading Aggression at 0 for Buy & Sell & 20% Hold zone I too ended up with 1042 shares in the Price Turnaround (same + and – trades as Standard AIM) and with a gain of $ 4,160. . .this difference being due to using fractional number of shares in the automatic Trade execution calculations). So, the Vortex AIM default setting for the trading aggression gives generally the same result as standard AIM (Vortex does not use the SAFE).

With the Trade aggression for Buy * Sell both @ 0,5 . . . which is only moderately aggressive. . . the Turnaround Gain is $ 8340. The inverse stock trading profit is not a surprise . . .it is of course quite logical. . .From an AIM perspective these stock are essentially unlinked and the cycle profits accumulate on both stocks.

When I did some testing on trading with Inverse Currency Pairs a while ago I was initially rather surprised that I did not end up with a profit in turnaround trading and thought initially that I was doing something wrong with the setup of the portfolio's but after a careful analysis I discovered that the results were correct! Considering that I was trading in a realistic setting from a base in Holland with the Euro as buying currency the inverse relationship profit that occurs with trading stock is wiped out by the inverse currency relationship of the Currency Pair Unit Values. . . .Essentially it came down to: X*(1/X)=1 in the turnaround trading . . . Plus I suffered (hypothetical) commission loses with the FOREX Account.

If I would have asked your advice on that no doubt you would have concluded that I would get that zero-result within two seconds without even going through the calculations :-).