Hi Allen, Re: Price Moves for AIM "by the book", etc..............
The ranges Toof mentions are approximately what you get using the standard AIM settings. If one is using a minimum transaction of 5% and 10% SAFE, those are additive as divergence from the Portfolio Control value. So, standard AIM trades occur when stock value is approx. plus or minus 15% distance from Portfolio Control (PC).
AIM-Hi actually would create a larger hold zone. It starts with the same SAFE of 10% but looks for 10% minimum trade size. This pushes the distance from a buy to a sell to nearly 40%.
Toof is correct that once you've reached either a buy or sell threshold and traded, the next sequential minimum trade in the same direction is about 5% difference in price from the latest transaction. With AIM-Hi the next sequential minimum trade would be about 10% away from the last trade price.
The next "opposite" trade (sell after a buy or buy after a sell) requires the value to change by a significant amount. It's close to 30%, close enough that we use that as a benchmark. This means that if AIM has you buy an additional 5% shares, it will want close to a 30% gain on those shares before it will ask you to sell them. (30% LIFO gain) Again, in AIM-Hi, that distance is nearly 40%.
In Stockcharts, you can set the Zig Zag parameter when setting up their graphs. You need to look down at the "Chart Attributes" section and the "Overlay" sub section. Here's the settings I generally use to view a stock or fund:
The W%R is found under "Indicators" as is the Accum/Dist setting.
I set the chart to Weekly data, HI/LO/Close for the indicator, 26 weeks simple Moving Average, Zig Zag 30, W%R 14 and below the graph and Accumulation/Distribution at 14 and below the graph.
This gives me a pretty good idea of whether a particular investment will have the Frequency and Amplitude of price change to drive the AIM engine.
Here's AAPL with the same settings:
Note the first example has far more frequent reversals. The second example has large enough price moves but they tend to be of longer duration and with fewer reversals. Both offer AIM trading opportunities. One has smaller, more frequent reversals (or round trips) while the other would present several sells in a row followed by several buys in a row.
Zig Zag setting of 30 means there has been a move of 'at least' 30% before a reversal was seen. This means it might actually move well beyond 30% in one direction because there hadn't been a 30% reversal seen. For AIM this means there might be multiple sequential buys or sells before a reversal of the trend changes the activity.
Hope this helps,
The ranges Toof mentions are approximately what you get using the standard AIM settings. If one is using a minimum transaction of 5% and 10% SAFE, those are additive as divergence from the Portfolio Control value. So, standard AIM trades occur when stock value is approx. plus or minus 15% distance from Portfolio Control (PC).
AIM-Hi actually would create a larger hold zone. It starts with the same SAFE of 10% but looks for 10% minimum trade size. This pushes the distance from a buy to a sell to nearly 40%.
Toof is correct that once you've reached either a buy or sell threshold and traded, the next sequential minimum trade in the same direction is about 5% difference in price from the latest transaction. With AIM-Hi the next sequential minimum trade would be about 10% away from the last trade price.
The next "opposite" trade (sell after a buy or buy after a sell) requires the value to change by a significant amount. It's close to 30%, close enough that we use that as a benchmark. This means that if AIM has you buy an additional 5% shares, it will want close to a 30% gain on those shares before it will ask you to sell them. (30% LIFO gain) Again, in AIM-Hi, that distance is nearly 40%.
In Stockcharts, you can set the Zig Zag parameter when setting up their graphs. You need to look down at the "Chart Attributes" section and the "Overlay" sub section. Here's the settings I generally use to view a stock or fund:
The W%R is found under "Indicators" as is the Accum/Dist setting.
I set the chart to Weekly data, HI/LO/Close for the indicator, 26 weeks simple Moving Average, Zig Zag 30, W%R 14 and below the graph and Accumulation/Distribution at 14 and below the graph.
This gives me a pretty good idea of whether a particular investment will have the Frequency and Amplitude of price change to drive the AIM engine.
Here's AAPL with the same settings:
Note the first example has far more frequent reversals. The second example has large enough price moves but they tend to be of longer duration and with fewer reversals. Both offer AIM trading opportunities. One has smaller, more frequent reversals (or round trips) while the other would present several sells in a row followed by several buys in a row.
Zig Zag setting of 30 means there has been a move of 'at least' 30% before a reversal was seen. This means it might actually move well beyond 30% in one direction because there hadn't been a 30% reversal seen. For AIM this means there might be multiple sequential buys or sells before a reversal of the trend changes the activity.
Hope this helps,
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