Replies to post #7408 on A.I.M. Users Bulletin Board (AIMUSERS)

[Conrad]

Hi Again, Buckmaker,

Conrad introduced the topic of 'Vortex' so now am I to abandon 'Newport' for 'Vortex'? I have not purchased either one (yet) but I will. It would appear that Newport has been awaiting an update for a while and one can use Vortex for 30 days of free testing.

You mentioned you wanted ACTION. With the multiplier concept(The Aggression Factor) you can trade frequently on small cyclic price variations. For example, by using a Buy/Sell Resistance of 0,05(or 5%) the Market Order is triggered only when the price variation exceeds 5% from the last ACTION.
The multiplier M creates a Market Order=M*(PC-V).
The Aggression Factor is simply a function that creates a progressive Multiplier.

I would not advise you against buying Newport in favour of Vortex. What vortex does is to give you choice between aggressive investing with lots of action and conservative investing with less action. Try out both, or more systems.

Conrad, you said "I ran a short run on DIA from September ....". What does that mean? Can you do 'what if's' and test runs using historical data with Vortex? How do you load in the historical data, by hand?

A short run is a run with historical data for less than 1 year(some people would call 1 years also short). Yes, you can run what if's by using different parameters. With the Windows program you can run a simulation but for now only with manual entries, which is OK is you use monthly dates. On the Excel spread sheet you can paste in the prices and the dates form a downloaded file, and you can make runs of 10 year historical prices. You need to be a bit familiar with Excel in order to play with the Vortex Excel: this program is set up for testing various alternatives and you can also play with the algorithms.

One difference between regular AIM and Vortex AIM is that some people regards Vortex as a Trading System while regular AIM is regarded to be an Investment System. I do not subscribe to that entirely: If the Resistances are set high and the Aggression factors low, Vortex also operates as an investment system, similar to standard AIM.

A cautionary note is useful here: With Vortex if you use low Resistances and high aggression factors you will run out of cash quickly if the stock drops in price drops more than you
want it to drop, or you will sell the stock too quickly in a sustained price rise. In such cases it would be useful to use a Stop Buy or a Stop Sell technique, or even a Stop Loss technique.

[Bernie Goldberg]

Hi Bucky,
Conrad made a very good suggestion. I think you would be better off with at least close to an equal amount invested in each of your holdings.
You would get the most ACTION by having individual AIM programs for each one. What could and probably willhappen with stock A representing 80% of your total and stock B representing 20% is something like this.
Stock A could go down 5% and Stock B could go up 15% which would normally be enough for an AIM sell, but since stock A has a 4:1 representation in your portfolio your AIM program would not have moved much at all.
Also when you start with equal amounts, say $3500 for each stock/ETF, when there is a transaction the decision about which stock to buy or sell is very clear.
I would recommend Newport which more closely follows Mr. Lichellos's plan. The AIM parameters can be changed to make it as risky or conservative as you want to have it.
Welcome to the group.
Bernie

[aptus]

Hello Bucky,

If you're looking for ACTION then it's better to AIM individual stocks with relatively higher volatility than it is to AIM indexes. In addition, AIMing each stock in a separate AIM portfolio is the way to go.

That way you don't run into the situation where price movements cancel each other out and thus negate AIM recommendations.

Finally, daily updates would give you the most action.

Incidently, I've backtested quite a few stocks with daily, weekly and monthly updates and found that the majority of stocks do better with more frequent updates. However some will do better with less frequent updates, but they're in the minority. The best course of action is to run backtests for yourself on your chosen stocks and view the results.

Don Carlson has also come up with MACRO filters that automatically filter inefficient price updates out for you. However this is an AIM modification and not part of standard Lichello AIM.

If you want to automatically run What If? scenarios and perform historical testing without having to manually enter hundreds of price quotes, you can use the Automatic Investor software (http://www.automaticinvestor.com/index.html ).

It retrieves up to 40 years of historical data from the Internet and allows you to automatically run as many backtests as you'd like on any stock and most US mutual funds. In addition you can automatically perform AIM parameter optimizations using the built-in Optimizer.

You can download a free trial to see if you like it from here --> http://www.automaticinvestor.com/trial.html

Once you've downloaded and installed the software, click the HELP button to bring up the User's Guide. In addition to explaining the software's features it will also give you a good overview of how to use AIM in general and provide some basic investment concepts you can use with AIM.

If you have any other questions, feel free to let me (and others) know.

[jibes]

Bucky
You asked:
I am looking for 'ACTION" where I can tweak my AIM portfolio about once a week. Is this a reality?

I have found that once a week seems to give very good results overall. There are exceptions of course but who can predict them?

If you want action check out my new "SR", it handle cash very well which is a major bugaboo with reg AIM and it's very easy to do, really!

Jibes
TrendSeekers at:
http://jibes0.tripod.com/trendseeker.html