A.I.M. Users Bulletin Board

[SFSecurity]

Hi Toofuzzy, Thanks for the further explanation of your approach. I see one potential problem with it, though. You say in your first post:

Second, settings, you can start with $5,000 in Stock but set PC at $10,000. Cash will still be $10,000. If the stock is $10 / share PRETEND you have 1000 shares ( instead of the 500 you actually have)
[snip]
Your first trade will be 100 shares (10% of 1000 shares)

but in your second post you say:

So if you did a ratio of $6,000 cash, PRETEND $4,000 STOCK and PC with really $400 STOCK, that would allow one (a) sell on a 15% rise.

The problem that with $400 of a $10 stock one would have only 40 shares. If the price had gone up 15%, i.e. $11.50/share, the requirement to sell 10% of your PRETEND holdings would mean selling all 40 shares and a gross income of $460 or a net of $40 assuming commission of $10 to buy and another $10 to sell. This does not seem worth the effort involved.

True, if one multiplied the base figures by 10 or 20 the gross income would be much more rational at $580 or $1180 net income but one would still have no stocks/ETFs left in the position. Is this bad? Not necessarily as one could still wait for a buy and reopen the position, an interesting approach but it leaves a lot of cash sitting idle earning nothing therefore making the overall gain over time less than simply putting your money into an index fund and not bothering to trade at all.

As to your question about differing parameters from the online one, the online one I'm referring to is the one with your e-mail address in the notes: http://web.archive.org/web/20120609073103id_/http://www.aim-users.com/calculator.htm

(BTW there is a minor wording issue with it. It says "Minimum Purchase % Of Stock Shares" but the reality is that the percentage is for both buy and sell.)

As to what is different is probably based on the difference between the way I was taught to calculate percentages up and down and the way it handles them. I've never been able to exactly match the way the online calculator does it (and, like lbdina, I was never able to download the online calculator and make it work.) I've come quite close but decided to play with it to come up with another version.



Whoops, I just saw some bad wording in the explanation. What I meant is " Try 15% for each...."

Anyway, the online calculator gives a much wider range with the parameters in the illustration.

@ Stock Value Above $14286
Min Sell Order Size $2857
Min Sell Price $14.29
Min # Shares Sell 200

@ Stock Value Below $7407
Min Buy Order Size $1481
Max Buy Price $7.41
Min # Shares Buy 200

I hopes that helps.

Warmest Regards,

Allen

BTW, anyone want a copy of the spreadsheet drop me a note at [e-mail]