Tuesday, February 22, 2011 3:37:32 PM
Yukkie, Grabber. . .
On Buys, PC increment = Trade $ amount.
On Sells, PC decrement = Cost of Shares sold (LIFO).
What is the difference between "Trade $ Dollar Amount" and "Cost of shares Sold"?
Or how should I figure out the difference? . . .just to poke you a bit!
. . .Therefore the PC decrement would be 1650, not 2250.
I get it! . . .but your are doing something that relates to the American Taxation System(which I understand now). . .making a distinction between shares in a pool that are not rally identifiable in practice. . .like raindrop in the Ocean. We had some interesting discussion on that. I understand what you did . . .but instead of using the last acquisition price you could as well have used the average share price of all the shares in the Portfolio. . . Pool Price.
Alternatively you could have applied a multiplying factor to the "LIFO Cost" of these shares . . and you can do the same with the Selling PC update:
PCs2=PCs1 + fs* Sell $ Value
PCb2=PCb1 + fb* Buy $ Value
and then you have exactly the same type system for PC-updating as Vortex AIM uses. The main question here is:
“Why should using lower value for the PC-updates be better than a higher value?”. . .If you do not know that answer yet then any value for fs and fb would be just as interesting, and then you do some experimenting to find out what the differences are that you get
I have no idea what effect it will have on your stop loss actions. All I can say that changing the values of the PC relative to the standard AIM values will either slow down the trading (putting on the brakes) or speed it up(acceleration the Cash Burn and/or acceleration the Equity Sell Off) , depending on whether you change the PC upwards or downwards compared to a particular reference amount you would use for it.
As far as I know a Stop Loss Limit is normally completely arbitrarily chosen, but you can obvious construct any functional relationship for it related to Equity Value. . for example the higher the value rises the smaller you set the Stop Loss to capture the greatest profit on a price reversal. . .on the other and you can argue that a too early equity dump is not desirable as in case the price recovers after a small dip at the top you would have to buy in again but then the price might be still higher and could drop just after you bought in at the higher price and extra costs.
This is new territory for me to make judgements on it.
I whish I was an Oracle.
On Buys, PC increment = Trade $ amount.
On Sells, PC decrement = Cost of Shares sold (LIFO).
What is the difference between "Trade $ Dollar Amount" and "Cost of shares Sold"?
Or how should I figure out the difference? . . .just to poke you a bit!
. . .Therefore the PC decrement would be 1650, not 2250.
I get it! . . .but your are doing something that relates to the American Taxation System(which I understand now). . .making a distinction between shares in a pool that are not rally identifiable in practice. . .like raindrop in the Ocean. We had some interesting discussion on that. I understand what you did . . .but instead of using the last acquisition price you could as well have used the average share price of all the shares in the Portfolio. . . Pool Price.
Alternatively you could have applied a multiplying factor to the "LIFO Cost" of these shares . . and you can do the same with the Selling PC update:
PCs2=PCs1 + fs* Sell $ Value
PCb2=PCb1 + fb* Buy $ Value
and then you have exactly the same type system for PC-updating as Vortex AIM uses. The main question here is:
“Why should using lower value for the PC-updates be better than a higher value?”. . .If you do not know that answer yet then any value for fs and fb would be just as interesting, and then you do some experimenting to find out what the differences are that you get
I have no idea what effect it will have on your stop loss actions. All I can say that changing the values of the PC relative to the standard AIM values will either slow down the trading (putting on the brakes) or speed it up(acceleration the Cash Burn and/or acceleration the Equity Sell Off) , depending on whether you change the PC upwards or downwards compared to a particular reference amount you would use for it.
As far as I know a Stop Loss Limit is normally completely arbitrarily chosen, but you can obvious construct any functional relationship for it related to Equity Value. . for example the higher the value rises the smaller you set the Stop Loss to capture the greatest profit on a price reversal. . .on the other and you can argue that a too early equity dump is not desirable as in case the price recovers after a small dip at the top you would have to buy in again but then the price might be still higher and could drop just after you bought in at the higher price and extra costs.
This is new territory for me to make judgements on it.
I whish I was an Oracle.
Conrad Winkelman
What is Vortex AIMing? Look for my Vortex Discussion Forum:
http://investorshub.advfn.com/boards/board.asp?board_id=1341
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