RE:RE:Chem Trade 
November 20, 2014 11:58 am
hi contra, what do you mean re: units, when you posted "Buying three (3) units of HOU-T after selling out all of our HOD-T." i am not familiar with this expression. thanks, hope all is well. AT.
Excellent question AT. Units are logarithmic trading patterns we use to either SELL or BUY falling knifes typically. Each unit is defined as a exactly one board lot or 100 shares. Small investors could use 1/10th positions and larger institutions (Hedge Fund Managers) can use x00's or x000's if the float allows.
Each additional SELL or BUY is then simply one additional board lot, or 100 shares. Thus, our progressive (or regressive if we are selling) logarithm is defined as the number of shares held +100 as compared to the initial position in the target security. Units are therefore defined by the following trading board block calculations:
Units Authorized NEW BUYS/NEW SELLS INVENTORY Held (000's)
1st unit 100 Shares 100
2nd unit 100+100=200 shares 300
3rd unit 200+100=300 shares 600
4th unit 300+100=400 shares 1000
5th unit 400+100=500 shares 1500
6th unit 500+100=600 shares 2100
7th unit 600+100=700 shares 2800
8th unit 700+100=800 shares 3600
9th unit 800+100=900 shares 4500
10th unit 900+100=1000 shares 5500
Etc...
If we added 2 units (from a fictional present holding of say, five (5) units held in inventory, we then need to BUY 1,300 shares which is comprised of 6th and 7th units (or 600 shares + 700 shares = 1,300 shares that now need to be purchased). Max. is 15 and double that for over-weighted units per position (max. allowable by constraint is 45 positions). -11.52% trailing stop-loss placed on each unit ACB as traded. Hope that helps and GLTU