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Author: vortexcw Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 727  
Subject: Re: AIM Software Date: 2/1/2002 8:26 AM
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Hello Rien,

Going back to your suggestion for circumventing the "flaw", from a curiosity point of view, I tried to visualise your 5-step procedure but somehow I fail to "get it". I mean, it does not appear to solve the basic problem I addressed.

In the first two steps(igoring the SAFE for now) the equity value returns to its orginal value y1...(at the start y1=pc1 also)

y3=y1+(pc1-y2)=y1 pc2=pc1 as you suggest ----->zero buy signal. OK!

Your next step is "fuzzy" to me. You calculate "next prices" using pc1=pc2, OK some prive differentials result..I assume you use the SAFE idea for that.

But now you raise the pc as usual pc3=pc2 +1/2(next buy advice) and as I see it there is again a buy-signal as pc3-y3 is not zero! The buy-advice is again 1/2 of the next calculated buy, and his is exactly the problem I addressed.

I think I see what is happening: After you have bought the fist lot and did not update the pc you calcuated a "next buy" signal and substituted that for the (pc-y) criterion. Then after updating the pc "as usual" you simply ignore the new buy-signal that results and stick to the calculated "next buy" you calculated.

I would agree that this will stop you from buying in on the new buy-signal but the methods appears to be more of a "fudging-approach" rather than anything else. One might as wel simply use the original method and ignore the residue Buy-signal and only buy if the stock price has dropped and then implement the buy as advised, with again ignoring the residue buy-signal.

After having reviewed the many discussions I have concluded, as I have said before, that using the pc-corrector pc=y eacht time a buy or a sell is activated appears to be the most effective solution. With selecting an appropriate "aggression" for the buy and sell seperately we can tune the AIM-behaviour as we see fit. With the addition of an appropriate Resistance for the Buy and Sell activity we can "time" the action so that a sell-signal on a trend-reversal is not actuated too soon(creating a delay-factor on rising prices).

I think that with this I have reached the end of my quest for a simple and convenient Advice Generator that gives a zero buy-sell signal after every buy and sell. It would appear unnecessary for me to dwell on this issue much longer.

I hope the discussions have provided more insight into the possibilities for AIMers. At the least I have come to recognize the merit of the 1/2buy pc-corrector on the bottom of a Dip...the Residue Buy at that point produces a delay for the selling off of the equity. The equity value has to rise at least to above the previous 1/2Buy amount in order to produce a sell signal. I agree that this is a positive featue of pc2=pc1+1/2Buy pc-corrector.

Is there more to say?

Conrad
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