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

To: labestul who wrote (15156)	3/7/2001 3:15:45 PM
From: OldAIMGuy	Respond to of 18929

Hi Barry, Thanks for your further thoughts. Do you recall the discussions about "Half Way To The Wall (HWTTW)?" In that idea, once the Cash Reserve reaches a point (usually where the next buy order will wipe out the remaining reserve) one would lessen the size of the next Buy order to half the remaining cash reserve. In essence this extends the purchasing infinitely with smaller and smaller purchases. My initial objection to that method was that it was somewhat anti-AIM. AIM's algorithm is a proportional device that calls for larger and larger buys to be made the further the current equity value falls away from Portfolio Control. HWTTW, therefore is functioning the opposite. It IS a practical way to extend buying once a major decline has been experienced and cash reserves are already inadequate. The idea of extending the frequency of sequential purchases would be helpful well before the HWTTW method would be needed. I looked at my own practices and found I was subconsciously doing this. Also, this would relieve the individual AIMer from making a judgement call as to the "proper" interval for sequential purchases. In this case we'd be using our own AIM information (the size of the Cash Reserve) as a guide. One thing I didn't take into account is that the Percent of Cash Reserve when the Equity Value is falling is always rising if we're not trading. It's a moving target. That does complicate things a bit! :-) Best regards, Tom