Replies to post #35683 on A.I.M. Users Bulletin Board (AIMUSERS)

[ocroft]

Hi nagpada
1. Ocroft:- do you have any stats. on the performance of your A+ stocks after you method of entry. What % hae gone up, what % down and by how much etc. Overall what has been the resultant performance of your portfolio.

The stock selection method I follow shows a 90% success rate since 1995.
This is from the Robert Drach model portfolio.
His book.HIGH-RETURN, LOW- RISK INVESTMENT by Herzfeld/Drach.
I am using the number that has been attained since he started his model portfolio. I don't have personal stats.
http://www.drachresearch.com/portfolio/

2.Ocroft :- what is your lookback period for your filtered entrance to find a high, since a recent high could be a retraction in a long term decline.

I usually go back at least one year. This will give me a good idea
about the action of the stock.
If the stock has fell steadily for nore than a year I will go back even further.


ocroft

[Conrad]

Hallo Nagpada,

Re. you AIM Question:

4. All :- Since AIM is a trade management system and is partial to volatility; volatility exist on different levels of time. Is anyone using AIM on a 30min., 1Hr. etc. scale. Has anyone used it or even done a whatif backtesting.

I used to do currency trading years ago but not on such a short time scale. Some time later I developed Vortex AIM. Which basically a symmetric AIM Ratio System with variable Buy and separately Sell Aggression Factors. In the latest version of Vortex 1.26g, I have, because of my interest in FOREX, incorporated Live Currency Pair Exchange Rate. . .updated every minute. . . and with small window in which the UP & Down behaviour is indicated. This can be used for very fast trading of volatile equities. At the moment it is only active for currency pairs but can be used for stocks if one has access to a live stock price service.
I have used back testing for the SPY Portfolio but that was not a “what if” procedure but intended to optimise the SPY Trading. . .but the recent SPY behaviour has remained in a narrow trading range and I have adjusted the holding zones downwards to create trading on the smaller up/down price movements.

Ca you explain what you exactly mean by What If Back testing . . . .I have use the Lichello Series 10; 8; 5; 4; 5; 8; 10; 8. . . . . .This is a What If process. Is that what you mean?

Regards,

[Adam]

Hi nagpada, About AIMing Leaps, I did that years ago with Leap calls on MSFT. The idea was to take a dependable stock that lacks volatility and AIM the long term call. It worked out OK but I remember I just scraped through and decided not to do this as it's too risky.

The problem is the same as with regular stock AIM except now it's compounded by the expiration date. The assumption in AIM is that the stock returns to it's buying price, if not it can sink a lot of money and lose it. At least with regular stock you can wait it out and hope the stock recovers. With Calls if the stock drops you have a limited time to wait for recovery before you lose your investment. I would not do it again as it's too risky with AIM.

The same can be said of AIMing inverse funds-- it's the same problem as a bear market is temporary and you have limited time to get out with a profit. I did that as well and was lucky to just scrape through.

I still maintain, after learning the hard way, that the best vehicle for AIM is the ETF, dull as it may be.

Adam