Hi Toofuzzy, I agree, one uses AIM for setting buy/sell points. Looking at ZigZag is just a way to see the possible number of trades, as you say, but by looking at the % change at the indicated points one can get a better idea of the actual number of trades you might get.
I played with your suggestion as I understand it using the online calculator: " PRETEND you own twice as many shares and make MIN TRADE SIZE 10% PC will be twice the size also."
So PC 10000, shares 1000, buy/sell 10%, minimum shares 5% and I get sell at $11.77, 50 shares, buy at $8.70/50 shares.
Then PC 20000. shares 2000, buy/sell 10%, minimum shares 10% and I get sell at $12.50, 200 shares, buy at $8.33, 200 shares.
I get 4 times as many shares to buy/sell but have a range of 150% instead of 135%. Not good if one wants volatility.
If, however, I set minimum shares to 5% with PC at 20000, shares at 2000 and buy/sell at 10% I get a sale at $11.76 of 100 shares and a buy at $8.70 for 100 shares.
If, using the original parameters instead, and I simply double the base number of shares I sell to 100 I get $1177, or $177 profit (minus commissions of course) as opposed to $588.50 or $88.50 with the standard approach. Assuming the commission is $10 my net is $167 versus $78.50. Quite a difference.
So, using the calculator, it seems leaving the minimum sale at 5% and doubling PC and shares is the best approach.
As to potentially selling out one's position, that seems unlikely given that you still have 90% of the shares you started with. The likelihood of getting sufficient consecutive sales to eliminate your position is incredibly small. Run the numbers on a spreadsheet. Using my version of the BareAIM spreadsheet with $10,000 PC, 10% buy/sell and 5% minimum (well, not exactly as the minimum number is a fixed amount, not a percentage of stock on hand) I would have to get 5 sales to get down to ~200 shares and the price would have to double. Given the relative range and the number of trades that seem typical is seems highly unlikely to happen before there is a drop in the stock price and a buy.
Oddly, if I overrode the sale with double the number in the spreadsheet, it wanted me to buy more right away at the next price up. Weird.
Anyway, it seems to me that combining what you do with paper and pencil with doubling or even tripling the number sold, perhaps even bought, is not an unreasonable thing to think about.
Best,
Allen
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