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Thanks for your reply, Chuck.
How does one specify last-in-first-out accounting if one is doing all
of the trades
in the same futures account? Do you know how one documents this
for the IRS?
Does it make a difference if one does it in different futures accounts?
Thanks so much for taking
the time to answer my questions! I appreciate it.
All the best
Matt Kratter
CRLeBeau@xxxxxxx wrote:
In a message
dated 7/12/01 9:38:13 AM Pacific Daylight Time,
mkratter@xxxxxxxxxxxxx writes:
I
wonder if anyone has any thoughts on the following system.
Assuming one has the necessary
capitalization and patience, would it work?
Rules
1. Go long only.
2. Buy the front month Naz
emini at 1800, 1700, 1600, 1500, 1400, etc. all
the way down or all the
way
up!
3. Sell each contract only
when it reaches a 100 point profit.
4. Rollover if necessary.
This is a strategy widely
known as "scale trading".
It takes a lot of capital
to make it work. You also need to use "last in -
first out" accounting.
The hidden danger is a prolonged
down market where you wind up holding a huge
position of big losers and
run out of capital. It also violates the common
axiom of "cut your losses
and let your profits run". This strategy holds
losers forever and always
takes small profits.
It might work in particular
circumstances but be careful about using this
strategy on a regular basis.
Chuck LeBeau
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