Hi Tom, I agree that keeping the commissions a low % of the total of a trade is important. I'm working toward a minimum dollar trade and my first step has been to match the online calculator and then migrate to a dollar minimum. What I was comparing to was the online calculator versus what I was doing for a spreadsheet and my spreadsheet is working essentially the same as the online calculator, barring the difference in the buy price.
Given what you say, perhaps the online calculator is not doing it the way you say: "Next Buy/Sell prices are a relationship between the PC Value and the Share Value (not share price)." This seems to be true only with a 50% stock, 50% PC, as you will see below.
The problems with the online calculator are twofold: using the standard 10/10/10 and 50% cash tends to create a transaction that is too small in dollar terms, the other problem is that the buy signal is closer to the current price than the sell signal which is not good, in my opinion. I believe it promotes buying too soon. Another problem is that, typically, as you increase any of the parameters you increase the price range needed to get a transaction above the minimum $ amount desired, $1000, in this case.
I was using the parameters from a small position that I'm trying to set buy/sell points and is actually too small. So, to make it easier to see I've switched over to the more standard $20,000 with $10,000 PC and stock value of $10,000.
@ Stock Value Above $12500
Min Sell Order Size $1250
Min Sell Price $12.5
Min # Shares Sell 100
@ Stock Value Below $8333
Min Buy Order Size $833
Max Buy Price $8.33
Min # Shares Buy 100
if you increase the buy safe to 20% it actually reduces the dollar size of the buy transaction:@ Stock Value Above $12500
Min Sell Order Size $1250
Min Sell Price $12.5
Min # Shares Sell 100
@ Stock Value Below $7692
Min Buy Order Size $769
Max Buy Price $7.69
Min # Shares Buy 100
and if you increase the stock sale to 15% but leave the buy safe at 10% you get a different problem:@ Stock Value Above $13333
Min Sell Order Size $2000
Min Sell Price $13.33
Min # Shares Sell 150
@ Stock Value Below $8000
Min Buy Order Size $1200
Max Buy Price $8
Min # Shares Buy 150
Yes, the dollar size is better for the buy but now the range between the buy and sell is is 166.63% (164.9% on my spreadsheet because I can set the minimum buy share % separately) as opposed to 50% with all 10%s for safes. This may not look like much of a problem but, since the recommended positions are ETF/ETNs, many do not have a price range much bigger than 50%. Of the 1641 ETF/ETNs in my list only 22.9% have a 52 week range greater than 150%, or $8.33 to $12.50 as one example. This would mean that the likelihood of any transaction happening anytime soon is unlikely.
The minimum $ transaction problem is solved if the price of the stock is still $10 but it is a $30,000 account and 50% Cash:@ Stock Value Above $18750
Min Sell Order Size $1875
Min Sell Price $12.5
Min # Shares Sell 150
@ Stock Value Below $12500
Min Buy Order Size $1250
Max Buy Price $8.33
Min # Shares Buy 150
My spreadsheet more closely matches the online calculator for this example: Portfolio Control $15,000
Share Price $10.00
Shares Owned 1500
Share Value $15,000.00
Sell Minimum % Shares 10.00%
Sell Safe % 10.00%
Buy Minimum % Shares 10.00%
Buy Safe % 10.00%
Next Sell Price Above $12.50
Shares to sell 150
Share Value $1,875.00
Next Buy Price Below $8.29
Shares to buy 150
Share Value $1,243.00
However the online calculator is totally screwy if one is doing an AIM-Hi, 80% stock, 20% PC for a $10 stock with a $20,000 position, i.e., $16,000 in stock and $4000 in cash as PC:@ Stock Value Above $5000
Min Sell Order Size $500
Min Sell Price $3.13 - Less than 1/3rd cost
Min # Shares Sell 160
@ Stock Value Below $3333
Min Buy Order Size $333
Max Buy Price $2.08 - the odds of an ~80% drop are trivial
Min # Shares Buy 160
This entry was assuming a $20,000 position, $16,000 on a $10 stock with $4000 cash position. Changing to a $30,000 or even a $100,000 position doesn't change a thing except the dollar size of the transaction. The sell and buy prices remain the same, $3.13 for a sale and $2.08 for a buy. My spreadsheet has the exact same problem, to the penny on sell and buy prices.
How how are you calculating the buy and sell prices on an AIM-Hi position? Is the answer an LD-AIM approach?
Oh, well, back to the drawing board.
Best,
Allen
AI
