AIM  e-gold®  e-metal®
Transaction  Calculator
User  Document

The Objective:

This program is designed to help investors such as yourself who are interested in increasing their holdings of precious metals to do so using an AIM trading method.

The program is designed to take advantage of price fluctuations in the precious metals, and more specifically, in fluctuations of the price ratio between pairs of precious metals.  The program is designed to facilitate your trading of gold vs. silver, gold vs. platinum, and gold vs. palladium, using e-gold holding accounts.

Basically, as the price of one metal of a pair increases relative to the other, you sell some of the metal whose price has increased.  You then use the proceeds of that sale to buy more of the metal whose price has decreased relative to the other.  Note that the absolute price levels, in whatever fiat currency, are not important.  What is important is the ratio of the prices.  It is the change in the ratio that, if sufficient, will trigger a trade.

You may have done something like this in the past, or considered it.  What the AIM method brings to the process is a mathematical method of determining how much of the (relatively) appreciated metal to sell at various price ratios.  By incremental selling and buying over time, not "all or nothing" plunges and dumps, the objective is to increase your holdings over time.

The Measuring Stick:

Stocks and commodities/futures prices, your trading results, your salary, the cost of a latte at Starbucks, etc., are all measured in dollars, or whatever the name is of the fiat currency you are subject to.

The "Measuring Sticks" are now generally fiat currencies.  Everything's value or cost is usually denominated in some fiat currency.  The U.S. dollar (US$) is a fiat currency.  (Fiat currencies have no tangible value; they have value only because of government fiat, including legal tender laws.)  Gold may be priced at 400 US$ per ounce.  Silver may be priced at 7.50 US$ per ounce.  And those prices will fluctuate.

Historically, the Measuring Sticks were precious metals (PMs).  The British Pound, for example, is now a fiat currency.  It was once actually a POUND of (sterling) silver, a "Pound Sterling".

As an aside, consider what a pound of silver would get for you today, vs. what a British "One-Pound 'note'" would get for you.  And consider, further, that many think that the price of silver, in the various fiat currencies, has been manipulated to a low level for a number of years.

Anyway, let's turn the Measuring Stick back over.  Let's consider gold as the standard.  So, if an ounce of gold is normally considered to have a value of US$400 an ounce, at the moment, how would a fiat US dollar be valued in gold?  The value of the dollar, then, using gold as the standard, would be 1/400 ounce of gold.

Similarly, if silver is pegged at US$7.50 per ounce, then a dollar would be valued at 1/7.5 ounce of silver.

In this program, gold is used as the Measuring Stick.  All values are related to ounces of gold.  The program uses the fiat US dollar prices and figures as an intermediary, only as necessary.  So what is the value of silver, if one is trading the gold/silver pair, relative to gold?  The price of gold in US dollars is used.  The price of silver in US dollars is used.  Then, the ratio of the two prices is taken.  The US dollar terms cancel out, and you have a ratio of, in this example, 0.01875 OzAu/OzAg.  (OzAu = ounces of gold, and OzAg = ounces of silver).  That means that the "price" of one ounce of silver is priced at 0.01875 (ounce of gold).

When trading stocks, stocks are traded against the dollar (or whatever fiat currency).  Buys and sells are triggered by what the stock price is in that currency.  Similary, the e-metals (silver, platinum, palladium) are traded against gold when using this program.  In this case, the "price" is the price ratio.  Buys and sells are triggered by what the price (ratio) is in terms of gold.

A complication arises with the Bid-Ask prices.  When trading a stock against a fiat currency, a Bid-Ask applies only to the stock.  But, when trading the e-metals, a Bid-Ask applies to each of the metals, the gold and the other metal (OM).  There is the gold Bid price (AuBid -- $/OzAu), the gold Ask price (AuAsk -- $/OzAu), the OM Bid price (OMBid -- $/OzOM), and the OM Ask price (OMAsk -- $/OzOM).

The price (ratio) depends on which of the metals in a pair that you are buying and which you are selling.  What is important to remember as a trader is that you, as a trader, always pay the higher price (ASK) when you buy, and you get the lower price (BID) when you sell.     So, if your transaction would have you potentially sell the OM and buy gold, then you would use the OMBid and the AuAsk to calculate the price and possible transaction using that price.  If you were to buy the OM and sell gold, then you would use the OMAsk and the AuBid to calculate the price used.  This program automatically determines which price combination to use to calculate the ratio.  That ratio is then used to see if a transaction is possible and, if so, to determine the amount of the transaction.

e-gold also charges a commission (fee) on the metal bought, but not on the metal sold.  Their fee schedules, at
http://www.e-gold.com/unsecure/fees.asp
are sliding schedules, covering transactions from the very small to large.  Each e-metal has its own fee schedule.  This program assumes in the calculations that the maximum fee, which is not really very large, is assessed on the particular e-metal buy transaction.  The effect of the fee is incorporated by modifying the ratio slightly to a "real" (net) ratio for use in program calculations.

Prerequisites:

There are a few prerequisites.  For you to get the most out of this program:

1. You should have a grasp of, and preferably experience in, AIM methods used in stock and/or fund trading.
   
   The book that started the AIM phenomenon over twenty years ago is Robert Lichello's
   How to Make $1,000,000 in the Stock Market -- Automatically!
   
   You should familiarize yourself with the other pages on this site.
   The main Core Position Trading (CPT) page is at:
   http://www.bean-d.com/cpt/A>
   The AIM Basics page is at:
   http://www.bean-d.com/cpt/aim-basics.htm
   AIM Stock/ETF Fixed Commission Transaction Calculator Description:
   http://www.bean-d.com/cpt/aim-stock-etf-transaction-calculator.htm
   AIM Stock/ETF Fixed Commission Transaction Calculator User Document:
   http://www.bean-d.com/cpt/user-doc-aim-stock-etf-transaction-calculator.htm
   
   
2. You will need to set up and fund an e-gold account for each metal pair (gold/silver, gold/platinum, gold/palladium) that you wish to trade.  I would not fund an account with less than US$2500 for each metal pair traded.
   
   My e-gold information page is at:
   http://www.bean-d.com/e-transactions/e-gold-payments.php
   You can browse the e-gold site at:
   http://www.e-gold.com/e-gold.asp?cid=107658
   You can open an e-gold account at:
   https://www.e-gold.com/newacct/newaccount.asp?cid=107658
   (Note:  "https:", not "http:".  Javascript and Cookies must be enabled while setting up an account.)
   
   
3. You must have patience.  As the metals usually move in lock-step with each other, the price ratio of a pair of metals you are interested in may not change enough to allow trades for several months at a time.  Then you may get several trades within a few weeks as one metal moves dramatically relative to the other.  Note that if both metals of a pair move dramatically in the same direction, that the ratio still may not change enough for you to have a trade.
   
   The objective of this trading program is to increase, over time, the number of ounces in the account(s).  If the prices also increase in fiat money terms, that could be considered as a plus; it is not the main consideration.
   
   The purpose is to accumulate real assets, independent of any fiat currency gyrations, inflations, or deflations.
   
   If you are concerned with fiat money increases, using the Stock/ETF AIM Calculator Program
   http://www.bean-d.com/cpt/aim-stock-etf-transaction-calculator.htm
   with precious metals (PM) stocks and funds has proven itself.  (I use both that program and this one.)

Installation is direct.  It does not screw around with the Windows Registry.  (Whoever came up with that concept at Microsucks ought to be shot.)  There is no installation program.  You, yourself, simply create a directory (folder), wherever you want, and copy the files into it.  Basic computer literacy is assumed.

Create a directory (folder) of whatever name you want, wherever you want.  Say you use the name CorePositionTrading.  It can be in the root directory or under some subdirectory.  I'll assume you use the name CorePositionTrading.  In the steps below, read whatever name you chose instead of that.

Under CorePositionTrading, create a subdirectory of whatever name you want.  I suggest AIM_Gold.

I'll assume you use the name AIM_Gold.  In the steps below, read whatever name you chose instead of that.

Copy the .exe file Next_BS.exe into the AIM_Gold subdirectory.

You can then run the program starting from DOS or the Windows Explorer (NOT Internet Explorer).  You could also set up a shortcut on your Windows Desktop.

Note:  If you get an error regarding a missing .dll file when you attempt to run the program, you will need to get that .dll file.  The file is MSVBVM50.DLL, which is necessary to run this and some other Visual Basic programs.  You could get it from who knows where on the Microsucks site.  It will be easier to get it from my web site.  You can get it there in two ways:

The .dll file itself (1,334,032 bytes),  http://www.bean-d.com/download/msvbvm50.dll
A zip file (682,820 bytes),  http://www.bean-d.com/download/vb_run.zip

Save whichever file you download in your AIM_Gold subdirectory.  If you download the zip file, unzip it in that directory to extract the .dll file.  Leave the file(s) in the AIM_Gold subdirectory.

Initial Setup:

The first time you run the program, the main screen will come up with the price boxes in the upper left area greyed out.  You can enter prices, but cannot calculate, as you have not yet selected a metal (OM) to trade against gold.

In the program menu bar, click on "File" and select a metal.  We'll use Platinum (Pt) as an example.  Assuming this is the first time you have run the program, click "OK" in the message box that pops up to create a file of default values.  Those values are then displayed in the "Data" and "Defaults" area of the screen.

You should now enter values corresponding to your account holdings.  Enter the ounces of gold in your account into the "Gold Qty (OzAu)" box.  Enter the ounces of platinum in your account into the "Platinum Qty (OzPt)" box.  Enter the value of the Portfolio Control (PoCo) for this particular metals trading pair account into the "Portfolio Ctrl (OzAu)" box.  This should be in ounces of gold, not some fiat currency, as gold is used as the standard in this program, as discussed in the "The Measuring Stick" section, above. 

The default values of the "SAFE (%)" and of the "Min Trans (OzAu)" (minimum transaction) are a good starting point for most accounts.  I would not advise decreasing the minimum transaction amount, but it can be raised.  A rule of thumb is to make it 0.40 OzAu, or approximately 10% of PoCo, whichever is larger.  As with PoCo, the minimum transaction amount is specified in ounces of gold (OzAu).  If you were buying or selling silver against gold, the ounces of silver involved naturally would be much greater than the gold ounces, but it is the equivalent gold ounces that is considered.

After you have entered the values to your liking, just click on the "Save Data & Defaults Shown" button.  Note that any time you change the "Data" or "Defaults" values, you should recalculate any previous calculations of interest to you.  Also note that any changes you make that you want saved must be saved with the "Save Data & Defaults Shown" button; they won't be saved when you exit the program.

Startup Metal Display:

You can choose one of the three metals screens to be displayed at startup, rather than the general screen with greyed out boxes.  In the program menu bar, click on "Options | Set Preferred Metal to Start", and select the metal you want for the screen to show at startup.  Or you can leave it at "No Preference", if you wish.

Calculate for Prices Entered:

This program assumes you are using the prices and services of OmniPay, a G&SR company, to do your e-gold (e-metal) transactions.
https://www.omnipay.com/secure/metal2metal.asp

You should use the Current OmniPay Exchange Rates (prices) as found at:
http://www.omnipay.com/currentexchange.asp
You will note that OmniPay gives three prices for each metal for each fiat currency -- Bid, Spot, and Ask. 

When you do a metal-to-metal (M2M) transaction, if and when determined by this program, it is the OmniPay Spot and Ask rates that should be entered for use by this program.  Enter the OmniPay Spot prices for the metal pair you are working with into the "BID ($)" boxes.  Enter the OmniPay Ask prices for the metal pair you are working with into the "ASK ($)" boxes. 

Make sure that you have entered "Data" and "Defaults" to your liking, then click on the "Calculate button.  If a transaction is indicated, you can click on the "Write BS" button, then "Yes" on the pop up message box, to view and/or print out the details.

Results Display:

After the calculations are complete, summary results are displayed in four boxes at the bottom left of the screen.  Two let you know if a transaction is possible, and two are just for your reference.

Price Box:   In the "Price" box is shown the calculated price ratio of the two metals, which includes the effect of the Bid-Ask spreads and commission (fee) on what would be bought.

Market Order Box:   The box just below the "Price Box" is the "Market Order" box.  The legend and box contents will vary, depending on the calculation results.

Total $ Equiv Box:   The "Total $ Equiv" box is just for your reference.  It shows the combined dollar equivalent of both metals if both were sold, and you received the Bid price for both.  Since nothing would be bought, there is no commission (fee) included.

Total OzAu Box:   The "Total OzAu" box shows the total in ounces of gold should the OM be sold and the proceeds converted to gold.  This assumes all the OM is sold at the OM Bid, and the proceeds put into gold at the Au Ask, less the commission (fee) on the gold that would be bought.

After the calculations have been completed, you can view or print out more detailed information from a text file generated by this program.  Click on the "Write BS" button to generate the text file, then click on "Yes" in the pop up message box to bring up the file in WordPad.

Note:  WordPad MUST be closed before doing another calculation, in order to obtain a valid new text file for the new calculation for display in WordPad.

Detailed Results Text Files:

Depending on the calculation results, one of five different types of results text files will be generated when you click on "Write BS". 

1. "OM Buy - Au Sell" details.  Example at:
   http://www.bean-d.com/cpt/aim_e-gold_tt1.txt
   
   
2. Potential "OM Buy - Au Sell" details, but no transaction was calculated because the minimum transaction criterion was not met.  This detail serves mainly to show you how "close" you may be to a transaction should the ratio move in the appropriate direction.  Example at:
   http://www.bean-d.com/cpt/aim_e-gold_tt2.txt
   
   
3. No transaction.  Example at:
   http://www.bean-d.com/cpt/aim_e-gold_tt3.txt
   
   
4. Potential "OM Sell - Au Buy" details, but no transaction was calculated because the minimum transaction criterion was not met.  This detail serves mainly to show you how "close" you may be to a transaction should the ratio move in the appropriate direction.  Example at:
   http://www.bean-d.com/cpt/aim_e-gold_tt4.txt
   
   
5. "OM Sell - Au Buy" details.  Example at:
   http://www.bean-d.com/cpt/aim_e-gold_tt5.txt
   For a screen shot corresponding to this example, see:
   http://www.bean-d.com/aim/graphics/aim_e-gold_tt5.gif
   
   

In the generated text files of type 1) and 5) above, the exact details you need should you place a metal-to-metal (M2M) order with OmniPay are included in numbered lines {10} through {16}, along with some other items just for your information.

To exit the program, simply click on the "File | Exit" menu bar selection or on the "Exit" button.  Any unsaved "Data" or "Defaults" values will be discarded.

If you want to keep the .dll file for running this and/or some other Visual Basic programs later, move MSVBVM50.dll to the Windows System directory, usually C:\Windows\System.

To uninstall the AIM Calculator Program, simply delete the AIM_Gold subdirectory and files.  Also delete the Windows Desktop shortcut if you created one.

Robert Lichello's "Automatic Investment Management" (AIM) ground-breaking book
How to Make $1,000,000 in the Stock Market -- Automatically!

Tom Veale's AIM Users Website

Investors Hub AIM Forums

If you would like assistance (consulting) with your Core Position Trading or AIM questions, refinements, and trading
contact me (David A. Bean)

Since the 1st Amendment to the U.S. Constitution is null and void,
except as permitted by law, the following disclaimer is provided:

This web page or others written by, hosted by, or linked to by David A. Bean are not to be construed as providing investment advice.  This material is provided for informational, amusement, and educational purposes only.  Consult a duly (dully) trained, authorized, credentialed, licensed, and brainwashed establishment professional before engaging in any financial transactions relying on this or any other information.