Hi Allen, Re: Calculating the Next Buy and Sell Prices for AIM...........
Back in the late '80s I decided I wanted to have those "next trade" prices ahead of making a spreadsheet entry. I fiddled with the math to get those prices with both a min. dollar and a min share priority depending upon which I felt was more important (low priced stocks vs high priced stocks, for instance). Once I had the math right my friend Bob Norman incorporated it into the Newport software as we developed it.
So, the simple answer is that I don't calculate those trade triggers any more. Newport does it for me. (I'm very lazy!)
Inside Newport it doesn't matter what parameters are chosen (Buy and Sell SAFE, Min. Shares and Min Dollars) or what the equity/cash ratio is. It calculates the results based upon "which is larger" of two possible transactions: 1) largest value share transaction 2) largest value cash transaction. In some cases it will give you the "next" price based upon shares for selling and dollars for buying. In those cases the suggested buy share count is higher than the suggested share count for selling. However, within rounding errors to the nearest share, the value of either transaction is about the same.
A further feature of Newport is that there is a "What If" window where you can enter a price to see how many shares would be bot/sold at some future price. It then also shows you the potential transaction AND gives you what your new adjusted Buy/Sell range would be if that trade was made.
I set it up this way because I wanted consistency in commission cost as a percentage of transaction cost. (Control the control-ables!) There is very little in the world of investing that we can control but commission expense is one of them. I don't know enough about the on-line calculator to know how it prioritizes its calculation. In Newport it is always presenting in the "whichever is larger value" form. So internally after it runs separate calculations, it picks and presents prices/share of the largest transaction values based on either the "share" or "dollar" minimum calculations.
Hope this helps.
AI
