Tom, The Williams component is a useful one. It resembles several other momentum based indicators. The most common use for these indicators is to tell speculators when to go long or short. I can see a practical application of this using options, buying calls when Williams is below 20, selling the calls and buying puts when the Williams is over 80.
OTOH, this is FAR from easy, even with Williams to guide you. As you can see from the graph, Williams jumps around quite a bit and it would be easy to make a non-profitable trade.
As a confirmation of what AIM does, Williams is a useful, illustrative tool, to educate newbies on what AIM does. The risk is that people will jump to the trading strategy that I outlined above, hoping for quick profits, when all you were arguing for is a conservative system that has confirmation in what its rules tell you to do in the Williams indicator.
The tax penalty for ST trading is mostly a documentation issue. With adequate record keeping, you can 'escrow' a portion of your trading profits sufficient to pay the taxes owed. Then, completion of a schedule D CAN be done with a fairly simple 1-2-3 or eXcel spreadsheet. All this may well be an unacceptable cost to some as you have indicated. What would really drive up the cost is filing such a return with 100-500 entries on Sch D thru a firm like H&R Block, Jackson Hewitt, etc. The fee could well exceed $1,000.
Note that I am NOT abandoning AIM. I believe in having a realistic understanding of what other people do with their investment monies, and what my choices are for my money. AIM still represents the best balance in risk/reward in my view.
Robert |
