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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: Steve Grabczyk who wrote (13913)	12/11/2000 6:36:32 AM
From: rgammon	Respond to of 18928

Steve, The theory says with a $10,000 PC, resistance (SAFE) is $1,000 (or 10%) and min trade is $500 (or 5%). You reversed these two figures, the result is still the same. As PC grows, you will want to keep the 15% total. Start by increasing resistance and keep on increasing until it gets to 10%. Then as PC continues to grow, adjust min trade so that it is 5%. As your stocks cycle, you will eventually get to $2,000, then $3,000, then $5,000 min trade sizes. Robert

To: Steve Grabczyk who wrote (13913)	12/11/2000 7:55:14 AM
From: OldAIMGuy	Respond to of 18928

Hi Steve, It's a matter of what LIFO gain you want to include for your business plan. That sum is a large part of the determination. Inside a retirement account there's no accounting to be done for frequent trading, nor is there a tax penalty being extracted for gains. So, leaving the minimums alone as the account grows should slowly reduce your HOLD ZONE's size and produce more frequent trades. If the HOLD ZONE's size falls to where you feel the LIFO returns smaller than you want, then you should pump up the SAFE first. In a taxable account there's the nuisance factor of paying taxes and also keeping track of all the transactions. So, there I tend to let the minimum trade size grow along with the account just to keep the number of transactions reasonable. I'll look today to see what my largest value of a minimum trade is and report it here. On one mutual fund, it's rather large if I remember. Best regards, Tom