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

To: OldAIMGuy who wrote (15091)	3/2/2001 8:52:52 AM
From: rgammon	Read Replies (1) \| Respond to of 18928

Tom said: "Tiny LIFO gains aren't practical in a taxable account. Just ask day traders. Also, the positive feedback to Portfolio Control during extended buying cycles tends to burn up the Cash Reserve rather rapidly when tripping daily buy orders. " True enough. However, I am fortunate enough to have >90% of my portfolio in an IRA, rolled over from a 401(k). The development of my TXN AIM occured inside that 401(k), and I did observe the deep drawdown of cash, both in my model and in the reality that followed. For several months, the only trading that occured happened as a result of the twice a month addition of cash from my paycheck. This was the source of the 'halfway to the wall" idea that I discussed at the last meeting. The problem for day traders is NOT the tiny LIFO gains. The ones that go broke do not observe their own rules. It is perfectly acceptable to trade for a profit of only $50/trade after commissions IF you get your entry point RIGHT so that only 1 of 3 trades executes at a loss. The successful day trader develops/adapts a set of rules to their own needs and STICKS to them. More so than AIM, rule breaking for day traders is a sure path to failure. Robert