ES Journal Archive (2006 - 2008)
- Thread starter Buy1Sell2
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In trading there are different tactics. You can anticipate and take position before the market moves in your direction, or you can wait after a confirmation that the market moves in a certain direction.
The problem with anticipating is that you have to have a very good system, otherwise you will be much too early each time , which means big losses without even having any certainty that the market will turn in your direction.
Waiting after confirmation means missing profits from the moment the market reverses till the moment you entered. But the risks are much smaller and when you put it all together your net profit will be bigger.
Anticipating often ends in wishful thinking. And wishful thinking is just the opposite of being objective.
I don't think so. It has nothing to do with being undercapitalized. It has all to do with being profitable. If you lose you lose, even if you are not undercapitalized. The perfomance will not change based on the grade of capitalisation.
Performance depends on the difference between entry and exit.
I think the next hourly bar should be interesting(this last hourly bar finished right at the OS line on RSI). Will it rise above that line or do a failure swing and bearish divergence from yesterdays high. Very interesting to watch. I will check back on the ES in an hour as per my plan.
While I respect your viewpoint, I believe that the way you are describing is correct for the smaller speculator. The bigger players, like commercials, institutionals and very importantly index funds play the game more from a position of adding to their trades to develop a good base for when the market is in their favor. The big profits are made in just this manner. Smaller specs are constantly bailing and the big boys just hold their ground and add . They add as well once the market turns in their favor. When a trader is capitalized in the right manner, they can be wrong for long periods and then reap huge rewards. All the while, they relate any losses to portfolio size. There are two different ways to trade--yours is not the wrong way.
What are you going to do if the S&P goes to 1500 and stays there for several years?
If you would have gone short in 1995 when the index was below 500 you would still be waiting for the market to turn in your favor, we are at this moment almost 300 % higher. The only difference between a small player and a big one would be that the small players loses small money and the big one would lose big money.
Well during the 90's most of the time I had a long bias, so it would have been more of would I have kept adding down to 100 and the answer is yes. I think I shorted in mid 98 and maybe a couple of other times during that period, but I didn't have the large short bias that I have now. I was long during the 90's due somewhat to the lackluster commodity prices of the time, but the market was technically strong and that was the main reason.
Had I been short at 500 and rode it to 1500 , we then had a major downfall early this decade where I would have picked up a huge gain. I did not short at the 500 and ride it to 1500. This was hypothetical. I did short however in early 2000. Again I was early but the weekly charts looked weak to me.
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