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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: Jack Jagernauth who wrote (11285)	5/29/2000 2:56:00 PM
From: Bernie Goldberg	Read Replies (2) \| Respond to of 18928

Hi, If I may stick my nose into this conversation. IMO 99%ROCAR is certainly much better than 34%. What would have happened with AIM "by the book"? Say 5% to trade 10%buy and 10%sell. Just curious. Bernie

To: Jack Jagernauth who wrote (11285)	5/30/2000 8:50:00 AM
From: rgammon	Respond to of 18928

Jack, Please remember that the 2% SAFE, 1% min trade was developed in a 401(k) where we were LOCKED into trading of only ONE stock. With RGAM, we were attempting to extract more of the volatility we observed in the intraday graphs. In addition, the modelling period, at 2 years, was quite long, and the saucer shape of the graph contributed greatly to the result. Lichello's rules, as Bernie suggested, may prove to be the best balance for the vast majority of stocks.

To: Jack Jagernauth who wrote (11285)	5/30/2000 10:06:00 AM
From: OldAIMGuy	Respond to of 18928

Hi Jack, In many types of control devices increasing the sampling rate and tightening the control parameters will improve efficiency. However, in the AIM model, we are still looking at what the gain between the last buy and the next sell is. If we narrow that band too much we cross the threshold of diminishing returns. In other words, if the Last In, First Out gain is very small, we can't make as much on more frequent trades as we could with less frequency and greater LIFO return per trade. It's like the old joke about losing money on each sale and attempting to make it up in volume! This is where the Day Traders trading on slim LIFO gains lose out to the broker and the tax collector. Another approach to deciding the LIFO gain is to adjust what your profit desires are in advance and then let AIM trade only as frequently as that goal is reached. This segment in the Q & A at my sight might help. aim-users.com In this case we're not trying to optimize the total return, but to assure ourselves that the business's profits are at least satisfying our minimum goals. Then let AIM trade as frequently as it will because of market price activity. Let me know if this helps, Tom