Hi Karw,
Interesting that you are playing with that idea of an algorithm for the SAFES. I have some questions on this.
Take the PC/share as the anchor point.
Use 1 * sigma for the deviation from the anchor point, so that is Minimum Buy or Sell plus Minimum Transaction size.
Sigma is determined by using the price time series, using the standard deviation in excel.
1 Is the anchor point the point on the x-axis at which the skewed distribution curve is at its maximum?
I am very "rusty" on statistics mathematics. Is it not so that the standard deviation only applies to the Normal curve?
2 You have applied these formulas to the AIM SAFEs, which are a measure of Braking the AIM Trade magnitude (tempering AIM’s Aggressive nature), which have a strong conceptual relation to the Vortex Aggression Factors. . .If one uses a negative SAFE is is a Trade Accelerator.
3 What if I apply your SAFE Formulas and use them for the Holding Zones? It is obvious that the function of the Hold Zone is different than for the SAFE so I would expect that the formulas would be different.
The Holding Zone is to determine at which point, or beyond it, an AIM Trade is considered effective.
How would you modify your formulas if they were to be used to Set the Hold Zones?
Of course I am assuming (for this post) here that for the concept Hold Zone there should be a fundamental definition that is to be rigorously connected to the dynamic nature of AIM Trading.
Until now I have heard and read about guidelines for the Hold Zone settings based on personal preferences. I have a gut feeling that it is difficult, if not impossible, to escape this personalization.
