A.I.M. Users Bulletin Board

[Daniel17]

Thank you all for the explanations.

I did some testing the last days. I tried AIM for a basket of 9 stocks. For AIM setup I calculated the average buy price for every asset, multiplied it with shares owned and I got my initial stockvalue for the whole basket. PC would be equal to that value, so SV=PC for my first entry because I already own all assets.

Then I tried to calculate the next sell and buy prices for this basket. For that I assumed I have 100 shares (of this virtual fund) and calculated the initial price of my basket: SV/100 = 247.86

According to Toms formula I get the following target prices (instead of minimum shares I use the minimum trade amount):
buySAFE=sellSAFE=.1
minTradeAmount=2500

nextBuyPrice = PC/(Shares*(1+buySAFE+(minTradeAmount/(Price*Shares)))) = 206.4
nextSellPrice= PC/(Shares*(1-sellSAFE-(minTradeAmount/(Price*Shares)))) = 310.16

So at the moment, no action/trade.

Then I tried the Torres formulae:

nextBuyPriceTorres = (PC-minTradeAmount)/(Shares*(1+buySAFE)) = 202.60
nextSellPriceTorres= (PC+minTradeAmount)/(Shares*(1-sellSAFE))= 303.18

There is a difference in the Hold Zone. Is that correct and which calculation would you prefer?

Daniel