If I understand correctly, you're trying to define an algorithm to determine a logical next price based on the current price, some market activity, and a random input. This is called a Random Walk, and the linked page is quite informative.
In economics, the "random walk hypothesis" is used to model shares prices and other factors. Empirical studies found some deviations from this theoretical model, especially in short term and long term correlations.
It's difficult for us to provide an exact function for you, since the exact behavior you expect of a function like this is inherently application specific. However it is possible to test the behavior and improve on it, by pulling it out into its own method and tweaking it until you see the behavior you want.
I would suggest pulling this behavior you've defined into an SSCCE (or a unit test, but assuming you don't already have a PHP unit test framework set up, an example will do fine) and creating some test cases, then you can tweak your algorithm in a vacuum and find behavior you like.
Here's some boilerplate to get started:
<?php
function nextPrice($price, $intensity, $buy, $sell, $rand) {
// TODO
}
// Can tweak these values between runs, or put them in a loop if you want
$testPrice = 10.0;
$testBuy = 10000;
$testSell = 10000;
for ($i = -5; $i <= 5; $i++) {
// random float, from http://stackoverflow.com/a/14155720/113632
// set to a constant if you want to isolate the randomness and test other variables
$testRand = mt_rand(0, mt_getrandmax() - 1) / mt_getrandmax();
echo "<p>Intensity: $i - Rand: $testRand = ".
nextPrice($testPrice, $i, $testBuy, $testSell, $testRand)."</p>";
}
?>
Some additional thoughts:
- Your
$ran
definition is definitely flawed, if$intensity
is-5
you're executing$ran = rand(5, -10);
which generates a warning and doesn't return the value you want. This is likely the root of your issue, as any negative$intensity
will essentially set$ran
to zero. - Furthermore your
$ran
definition is biased towards positive numbers, meaning the price is - rather quickly - going to rise even if there's bad news. I'd suggest ensuring your random value is equally likely to lower the stock as raise it, and if you intend for the stock to rise in value over time regardless (which seems like a bad idea to me) set a separate$longTermGrowthFactor
that always increases the stock by that factor, separately from the randomness. - Turn on warning reporting in PHP - since you presumably hadn't seen the warnings related to your
rand()
call, you likely have warnings and other error types turned off, which quite likely means there are other errors hidden in your code you aren't aware of, and without the reporting they're going to be hard to spot. - Use
mt_rand()
instead ofrand()
, the latter is deprecated, andmt_rand()
is a drop-in replacement providing better randomness.