Replies to post #44076 on A.I.M. Users Bulletin Board (AIMUSERS)

[ls7550]

Personally I've always gone with the log stochastic choice

( log(current) - log(bottom) ) / ( log(top) - log(bottom) )

Just fits better IMO.

If you opine a 100% gain from current levels would be high and you'd be OK to be in cash at that share price level, and 50% down would be low at which point you'd be happy to be all-in, and the current price was 100

(log(100) - log(50) ) / ( log(200) - log(50) ) = 0.5 (50% cash indicated).

When the price is 150

(log(150) - log(50) ) / ( log(200) - log(50) ) = 0.79 (79% cash indicated)

When the price is 66

(log(66) - log(50) ) / ( log(200) - log(50) ) = 0.2 (20% cash indicated)

...etc.


Clive.