Replies to post #38297 on A.I.M. Users Bulletin Board (AIMUSERS)

[The Grabber]

Hi jaiml.

FWIW:
I know I've posted this image before, but sometimes it bears repeating.

That is to say that the % of PC approach to doing AIM calculations is very close to Lichello's, but not exactly the same.

In addition, the insertion of Minimum $ in your settings complicates the calculation.

The AIM process, as Lichello defined it, never set a sell or buy price. His formula relied on the market price as the starting point. For those of us that wanted to put GTC orders out there, it needed to be reconstructed so that target prices and #'s to trade could be pre-calculated.

So, here is that reconstruction step by step (From LD-AIM Example):



Buy when stock price is less than or equal to
(PC-M)/[NumberOfShares * (1+SAFE)]
(10000-1000)/[1000 * (1+0.1)]
9000 / 1100
8.18
$1000 / 8.18 = 122 shares to Buy (rounded)

Sell when stock price is greater than or equal to
(PC+M)/[NumberOfShares * (1-SAFE)]
(10000+1000) / [1000 * (1-0.1)]
11000 / 900
12.22
$1000 / 12.22 = 82 shares to Sell (rounded)

The Sell side price and # is the same but the Buy side is different by 11 cents and 2 shares.

I'm really not trying to be anal about this since the different calcs don't mean much over the long term (as AIM is fairly forgiving).
But it must be stated from time to time that the % of PC approach is convenient, but it is not % of SV as Lichello originally defined it.