i have a 3 1/2 boy and an almost 3 year old girl. i used to stop him all the time and just be on top of his every mover when it came to him around her(she was 3 mo premature and i worry about her..lol).. but... once i just let thing play out and his taunting her or trying to stop her from play with something, ,if i just let it play out and not intervene, things usually worked out. as long as there wasnt' any physical hurting going on..
i had to let them try to figure out ways to work things out together. i used to be so on him..telling him to stop so much.. but theni realized and read some where.. to discipline both if they can't share or get along not just one. so then i started telling both of them if they can't play nice together , and that they needed to stop fighting over toys i was gonna put the toy up and no one was gonna get to play with it. so you guys need to share. it works most the time. if something like being sick or tired isn't also a factor. i have found myself saying 'cooper what are you doing to bella?'.. just when i hear her screaming about something. but then i figured out i was on him too much and realized she was just screaming for no reason. not sure if i'm of much help.
there is a book i liked called no cry/whine discipline..if you can't find it email me and i'll look at the book and get you the author.
sounds like time outs have been used too much for too much and they have become ineffective now. imo when discipline is used too often for too many little infractions that could be solved or talked thru by other means, then it doesn't work any longer. like they say about spanking. if you use it all the time then the kids could care less.. lol
i ways also reading recently that helped me.. that sometimes us parents make things worst by how we react or act to a situation. i know my temper and anger and such was making things worst. i'll have to find that book too.. not saying you have anger stuff like i do at times..but frustration is hard. :-(
good luck.. email anytime.. it's not easy with them so close. there is also a group that is just for closing aged siblings if you want it..
T.