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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 (15096)	3/3/2001 11:32:10 AM
From: rgammon	Read Replies (1) \| Respond to of 18928

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

To: OldAIMGuy who wrote (15096)	3/6/2001 4:08:43 PM
From: Gemlaoshi	Read Replies (1) \| Respond to of 18928

Tom, Interesting that you should mention the Williams %R. I have been using it for couple of years as a confirmation on my AIM portfolios. Of course, because I do not do this full time, my objective is to have fewer trades, but better trades. I use three indicators to give a sort of short, medium, and long term confirmation. RSI and MACD are useful for the short and medium terms (although you may want to play around with how they are calculated based on individual preference). As Bob G. points out, a 14 or 21 day Williams gives quite a choppy graph, with numerous trade indications. By trial and error, I stretched the Williams calculation out to 180 days, which smooths it out quite a bit. That seems to work best for my circumstances. A Williams at 0 and -100, in concert with the other indicators, seems to do a pretty good job at identifying the inflection points in prices. So far, I have gotten fewer trades than I would have otherwise, but OTOH, it has done a pretty good job of defining the top and bottom of a trading range. I'm still playing with this, so always interested in everybody's experiences. Dave