"Easier" to make money going Long than Short?

[eves_banished_children]

The markets bias is really to churn.

If you measured the up AND down movement in price all day long, every tick, and did the math on it, you'd find that even on a day where the market has a huge price increase, it's increase is pretty much dwarfed by the amount of churn that happens.

Said another way, a huge UP day is really UP, DOWN, DOWN, UP, DOWN, UP, UP, DOWN, UP (that's one more UP than DOWN for those counting at home). In the aggregate that means it went up, and chart traders care about that, but I'm not sure any scalpers do.

 

[tomorton]

The only market that has an inherent and constant bias in its direction would be a stock index. The weaker members are constantly being churned out and replaced by strengthening members, so there is an inherent upward bias to the index's numerical value, though not to the individual stock members. Nothing else has this.

This is a small edge but then the house's zero slot in roulette is likewise only a small edge, but look what they do with it......

 

[Troy Bombardia]

If you're in the stock market, then yes, it's easier to make money going long than short. The stock market has a bullish bias which means that it goes up more often than it goes down (up on 57-59% of days).

 

[trader99]

If you're in the stock market, then yes, it's easier to make money going long than short. The stock market has a bullish bias which means that it goes up more often than it goes down (up on 57-59% of days).

Agreed. There's definitely positive bias in the stock market. I find it harder to short index futures and make money consistently than just to go long. Even on down days there are many bounces or reversals from the bottoms.

I got rid of my short bias on the index futures, which is a good thing. Even when the trend is down, you gotta pick your spots to short. I put on a short earlier today and I was so nervous because of the SHARP upward thrust/reversals. I got out for a small profit then it goes down again.

Anyone else experience that? It seems like you have to time it almost perfectly for the short index futures trades to work. Other futures contracts can go down easily as well as up. Index futures have such spikey behavior due to many dip buyers...

what do traders on ET think?

 

[murray t turtle]

The only market that has an inherent and constant bias in its direction would be a stock index. The weaker members are constantly being churned out and replaced by strengthening members, so there is an inherent upward bias to the index's numerical value, though not to the individual stock members. Nothing else has this.

This is a small edge but then the house's zero slot in roulette is likewise only a small edge, but look what they do with it......

%% Good points tomorton. NOT a prediction ,but when you find one [stock]with most 10 year trends-thru 1 day downtrends trends down like GE......[ And C used to do before they reverse split it 10 times so $50 .00 on C, is really $5.oo]. And for uptrends ,some stocks trend much better, than others, most trends.

MOST all short systems under-perform long systems, in any market . [ + see GE comment above] But a good discretionary can beat both systems....
And many of the index creators can pick much better stocks than average; + as you noted/implied kick the weaker Citigroup out...... BUT C is up on 3 year charts;NOT a stock tip LOL. I prefer strong longs in a bull market uptrend [200 dma]; but as they say ''the shorts help fuel the rally'' I use SIFs as a benchmark, also ; but they dont pay dividends.[Edit note Paul Tudor Jones gave many of his investors a dividend or payment back , years ago,so never say never on SIF dividends ,so, to speak,LOL].

 

[Louis Winthorpe]

A lot of the responses in this thread focus on answering the question literally as if there is a definitive answer that is a one-size-fits-all. I'm still relatively new to trading but a conclusion I've come to very quickly is that some traders have a more innate ability/bias for shorting and some for going long and some are comfortable going both ways.

I know it's a politician's response but answering the question of whether it's easier to short or long depends on the trader, not on whether it's empirically easier to do one or the other.

 

[Handle123]

Fear conquers over being bullish, dropping markets holds much fear and much less jagged price action. Whereas rising markets have much more fakes of price movements because the masses prefer to buy than sell short. I prefer to sell or hedge to protect downside and open profits.

 

[RRY16]

If you’re long and wrong just keep buying and hedging, a couple of the whales on the ES journal can show you how it’s done.

 

[Louis Winthorpe]

There was a funny analogy I heard recently which probably isn't new to you guys:

"You go up the stairs and then down the lift" which I assume refers to the speed of a typical long versus short move.

Made me laugh.

 

[smallfil]

With hindsight and a lot of regret, I couldn't believe I lost all that money in 2016-2017 shorting the market. How stupid of a short bias.

This year I finally fixed that disease! Yay! I find it just as easy(if not easier) to go long than short. The entire market has a long bias!

I'm learning new long chart patterns. Today I tested a long pattern which in the past I got hurt because I shorted at that spot. But I recognized today that it was part of a long pattern. Made a little. Should have held for a longer time to ride it more. This was just to prove to myself that 1) I could identify it in real time 2) that I could trade it profitably. All part of the learning process.

So far, I only found one stable short pattern. There are way many more long patterns.

Even in a bear market or a downtrend(even intraday), there are spots to go long and make money. To short and make money you gotta pick your spots very careful and exit careful due to these SPIKES from bottom fishers and dip buyers.

What has been your experience? Are you equally PROFITABLE long and short if you were to break down your trades? I would think most people are more profitable long than short given the long bias in the market.

Anyhow, I gotta work on my analytics consulting now. Working from home and got a delieverable to hit. Just watching market and trading very infrequently today. hehe

The stockmarket can do only 1 of 3 things. Go up, go down or go sideways. There is a way to trade each one. The most obvious is follow the trend. Since, the stockmarket has a bias to the upside, longterm you can expect it to go up. That said, it does not go up like a rocket or an elevator. Few stocks do that but, when they do, watch out! It falls just as fast on the downside! One big mistake of retail investors and traders is to go short the stock market just because they think it is too high or too expensive! The stockmarket can be irrational for a long time and you will be broke long before then! Contrary to what you believe, you can make monies shorting the stockmarket. I just closed trades on KSS, INTC, BZUN and still have MOMO where I have put options on. All trades were short using put options. I also, closed trades on KSS and BZUN on the long side with call options. Overall, I did good netting around 25% profit overall counting the losses. I had 5 winners, 5 losses, average win $347, average loss $78, Win/loss ratio 4.60 to 1. Of the ten trades, 5 were call options and 5 were put options. This is a very limited sample as I made changes to my trading system and revised my money management as well. Money management changes I have not incorporated yet, in my trading otherwise, I probably, would have done better than the 25% profit.