Chapter 14
Comparison with Other Trading Systems
Vibratrading vs. Scale Trading
Conventional scale trading is in fact the deployment of the Microsiso mechanism itself, whereas averaging down is more akin to the Macrosiso mechanism. As you know by now, vibratrading is the effective use of both scale trading and averaging, offering greater flexibility and performance. Various simple mechanisms like dual or multiple sizing help the vibratrader extract both trend and vibrational returns simultaneously.
Vibratrading vs. Dollar Cost Averaging
Dollar cost averaging is one of the most popular trading and investing methodologies around, and is heavily used by many mutual funds. Its drawback is that it continues to invest in a market regardless of price. Even though it does purchase fewer shares as price rises, it will start to focus too much funding in the market at a particular price level should the market experience a very long period of consolidation. Vibratrading avoids this pitfall by only buying and selling when there is price motion in the markets. Finally, dollar cost averaging does not really have an exit strategy, and could thus prove disadvantageous should price revert to much lower levels.
Vibratrading vs. Value Averaging
Value averaging is slightly more responsive than dollar cost averaging. It has the advantage of occasionally taking some profits off the table, which makes it a much safer methodology, especially in uncertain financial climates. Nevertheless, value averaging ...
