Hi 1step,
Years ago I was discussing with Lost Cowboy the details of his Formula Plans or Lay Away Plans that he developed for investing a small amount of money every month on the basis of say $ 100. I am not sure of the exact details anymore. I recall this from memory as follows:
100=x=ax +bx
ax= added Equity
bx= added Reserve
Obviously a+b=1
As equity prices go up or down the values a a and b would vary. Depending on the price changes of the equity Lost Cowboy had various formulas to calculate a and b and just as for AIM, if I remember correctly, a could be negative if it was a good time to sell equity.
I used this idea to see how that could be implemented in Vortex AIM and of course that was the case. I called this version PremiVest along the tradition that various investment plans were coined as XyzVest by different people.
I tried several constructions in Vortex Excel and these were based on my Aggression Factors(AF) that were already programmed in Vortex. I will attempt to reconstruct the idea for this from memory. The Vortex Advice Generator is
Trade =(PC-V)* 1/(1-f). . . .f is the AF and can be any number other than 1.
M=1/(1-f) is the Trade Advice Multiplier
Asume now that we operate this with an initial investment of $ 100:
PC=V=50
PV=100
AF= 0,8
Price change = +10%
V2=55
Trade Ref = (50-55)/(1-0,8) = -5/0,2= -25. . .which means a Sell
A simple Formula would be. . . .maybe a good name for this is SimpleVest :-)
a=-0,25 and b= 1,25 ------>$ 25 equity would be sold and $ 125 would be added to the Reserve
V2 = 75 and R2 =125.
If however the investor is interested in still adding a small amount of money even after a price has risen then one could decide to buy $ 25 equity and to add $ 75 to the Reserve.
These are just 2 examples to illustrate that the investor first has to decide generally how he wants to respond to a price change and then a means can be constructed easily to split up the $ 100 accordingly. For example one can look at the Trading Range of en equity and at the top of the trading range decide a=0 and at the bottom b=0 and calculate a linear function based on where the price is between the trading limits: a=0 at the upper limit and b=0 at the bottom limit. This a [Ladder Formula] applied to a fixed amount X that can be invested each period.
Other formulas can easily be set up by anyone.
The special aspect of the Vortex AIMing is that I advocate that an investor can apply PremiVest with any amount X per flexible period whenever X amount of money is available to him. . .X is the Premi.
The amount X can be invested an any time without any qualification other than the availability of the money. The Holding Zone and the Minimum Trade are decided just like in Regular Vortex AIM that is done
The PremiVest Module in Vortex has not been finalized in regard to which formula for a and b is to be used. There has been too little interest in this investment option and we have decided not to develop Premivest to finalization, unless one specifically asks for it. In that case we would customize the formula for a modest fee.
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