assuming this thread is still for trading UOPIX with or without AIM, I have come across a promising and simple
method of trading this fund
The characteristic of UOPIX is that it moves twice as much
on the NDX on a daily basis (remembering always that does
not mean that UOPIX will out perform NDX by 100% in the long run). as we have seen lately, some of these moves can be as high as 18% in a single day. also, it is quite possible to time daily purchases of UOPIX using readily availabe realtime quotes of NDX
what has bother me about AIM, and even about the scale method that I am currently using, is that often one is not able to take advanatge of these huge moves (for ecxample,
even buying at the low of 48 does not allow partcipation on the two huge daily runs since then if you are waiting for a sale in the 70's)
so on a lark, I ran a spreadsheet simulation based on buying each and every down day in the UOPIX. the way I implemented this was to buy $2,000 for each 1% down move in the NDX (so if the NDX was down say 3.5% then I would buy $7k of UOPIX)
I then sold at 5% (or better) gain for that particluar buy.
the resuts are quote outstanding - using the 2k for each down 1% thde reults were 20% gain from June 26 to Nov 1.
also ran the test for 1k per 1% decline and for 3k - the results were proportional, ie 30% gains for the 3k test. naturally the more money invested for each 1% down, the bigger account necessary to fund the project
the following are considerations:
1) the large down moves in UOPIX are not taken advantage of because this is not a shorting system - I have not figured out how to deal with short trades that go "bad" (with long trades that go "bad", you just hold until the price rises and they become "good")
2) you can hold one or two buys that make take a LONG time to be sold (in this test there is one trade of 50 shares which will not be sold until UOPIX reaches 92, which could be a LONG time
3)you may run out of shares to sell in brief but straight up
rises in UOPIX
4) items 3 and 4 can be accommodated by changes in the sell strategy. for example, to counter running out of shares, some sells could be for the dollar amount (rather than share amount), thus adding shares to the account rather than dollars. this would also help offest the "stranded" shares
(problem 3) buy slowly reducing the avgerage share price for shares held in the account
this method does take advantage of the larger daily swings in UOPIX and could indeed turn out to be a very profitable approach over the long term
Bob |
