True, but the reason that what some call the "Lichello Flaw" wasn't a flaw for Lichello is that he made one transaction a month. So if he had a residual buy or sell it wouldn't matter because he would just check back next month. If the price hadn't moved then he would go ahead and do the smaller transaction at that time, a month later.
The problem with that is, what if the price spiked or cratered between the two transaction times? You would miss a good buy or sell opportunity.
One of the key differences in what a lot of people (including Tom I believe) on this board do is that the TIME DELAY is eliminated with the use of pre-set limit orders based on the AIM formula. This causes a problem when AIM comes up with residual buys or sells.
With the way I use AIM, I may make a transaction and then the next transaction might be in a week, or it might be 7 minutes later. This is the advantage of using limit orders instead of an arbitrary "update schedule".
One of things I always considered a flaw with the BTB method was the example of the stock that moved in the repeating pattern 10,8,5,4,5,8,10. Now this was for illustration purposes, but a lot of people have complained that most stocks aren't this volatile.
I make the OPPOSITE argument; what if the stock was even MORE volatile, and actually went from 10 to 4 back to 10 in a SINGLE MONTH while Lichello's books were CLOSED? Then every time he checked, the stock would be at 10. He would make NO TRADES, but he would have missed several buying and selling opportunities during the month.
AI
