Ha, that's the one ph1l! But noooo, the system in the first book (from what I remember) is nothing AT ALL what I am talking about. His system, if I remember correctly, was something like you put X percent of your money into the market up-front. He originally suggested 50%, but then I think increased it to 70%. Then you would increase your market investment by Y percent each period. But that increase would take into account the rise in your portfolio value. So if the market went up a lot you'd actually be taking money out. If it went down or stayed flat (or went up a little) you'd be putting more money in. His was simply a silly numbers system. What I'm trying to do is take into account market inefficiencies.
Ahhh, shiat, sorry to see he passed. His book, while kind of silly, was still a pretty good read from what I remember.
traders trade around their positions all the time...it's similar to what you're describing. mainly a mean reversion trading system. It should work like any other mean reversion system.