Replies to post #35803 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Jack

Saying there is a false signal in ocroft's method is like saying AIM is giving false BUY signals all the way to an all time low. It is what it is and how the method works. Otherwise you are data mining.

So yes it is possible for Ocroft to have a BUY and then have the market reverse and go lower. At the point it goes up again he will have another BUY

Similar to Ocroft's method would be to delay AIM trades till you have a 13 day MA cross a 30 day MA

You could also think of it in the reverse. You use the MA to signal trades but don't do them UNLESS AIM agrees. Gets rid of potential wip saw in trade signals.
Toofuzzy

[ocroft]

Hi Jack
There is nothing I can add to what Toofuzzy has said.
Buys are not based on signals. My buys are based soley on
the action of the stock.

Regards
ocroft

[Adam]

Hi Jack and Toof, I've been trying to pick out the exact signal for buying again. In the spreadsheet there are three values:

Raw Action = PC- stock value
Suggested Action = Raw action with Safe subtracted
Recommended Action = Suggested action with min trade size imposed

I gather from Ocroft's post 35795 that he's using Suggested Action.

As the stock recovers the Recommended Action will first go to zero, then Suggested Action, and lastly Raw Action.

That makes sense to me as well as waiting for Raw Action to return to zero may be waiting too late, and losing out on profitable trades. These are all buy filters that have a double edge sword. Make the filter too strong and you lose good trades. Make it too weak and you make a buy on a small up fluctuation that continues on the way down.

Compared to moving average crossover, the Ocroft method I find more appealing, because it uses our algorithm to generate the filter. With moving average crossovers you have to decide what those two numbers are and you're wondering if you chose those properly. Though I agree the principle is the same.

Adam

[Conrad]

Hallo Jack,

This surprices me!
I always had the impression that AIMers hated to borrow money to invest when the Reserve had ran dry.

In this back Test you are showing on 23 July the "Investor" has borrowed ~18300 and has a negative PV-value of ~870 (debt to the bank)

Thuis is not typical for an AIMer. . .right?

This method look very much like the Vortex TurboVest System :-)

Regards,