Hi Barry, Right from when I first started AIMing in 1988, I have always used the "Whichever is Larger" rule. In other words, I set a minimum dollar value for a trade based upon cost efficiency, size of the account and other parameters. I set a minimum share amount on common stocks which is essentially always 100 shares or multiples thereof. This is for accounting efficiency. (mutual funds I treat differently in that I'm using Average Cost basis rather than First In, First Out)
However, my next buy and sell prices are still set by whichever is the larger total value. If 100 shares is my minimum and also the larger, then my projected buy and sell prices are based upon that. If my minimum dollar value is the larger, then the predicted trade prices are based upon that. Inside the spreadsheet the formula looks at both and picks the larger transaction.
I know this messes up some folks new to AIM. They'll start with 200 shares of a stock and play endlessly with SAFE trying to get an effective Hold Zone while forgetting to reset the Minimum Shares and Dollars from whatever the default setting is to something rational for the size of the holding. Once they realize that the relative size of the trade compared to the value of the holding adds to the Hold Zone, then they shrink them appropriately.
This problem never happened with AIM on PAPER! Back in the "olden days" when a pencil and 13 column paper was "AIM Software", we just did the calcs and waited until the Market Order column showed something large enough upon which to act.
I recommend the exercise of recording every AIM Trade transaction on 13 column paper in full Lichello spreadsheet style for AIM newbies. It's not necessary to do it weekly, monthly or any time frame; just whenever one gets a trade. Running the calcs manually can teach the user a lot about what just happened inside the Software and only takes a minute or two each time there's a trade. This may sound old fashioned, but it's a great teaching aid.
Best regards,
Tom |
