Down at 1075 S&P I got a bit nervous and bought a small amount of puts. Normally whenever I do this, the market bottoms pretty soon after. I was just wondering, this could be a really good strategy, the "self-fade". Anyone tried doing this?
Fading yourself as a strategy
- Thread starter Ghost of Cutten
- Start date
just fade your emotional instincts during market extremes
e.g. don't sell or hedge during a panic, instead take a small long position
and don't buy more when shit is flying and everyone is talking about $100 oil and S&P 1300 (e.g. two weeks ago), instead pick up some hedges for your positions or close some winners.
doing the above is a lot better than 50/50, in my experience. Even when the market collapsed in 2008, you could make a killing going long after the major extreme drops.
shit just doesnt go straight up or down, no matter how extreme the news/event/situation
e.g. don't sell or hedge during a panic, instead take a small long position
and don't buy more when shit is flying and everyone is talking about $100 oil and S&P 1300 (e.g. two weeks ago), instead pick up some hedges for your positions or close some winners.
doing the above is a lot better than 50/50, in my experience. Even when the market collapsed in 2008, you could make a killing going long after the major extreme drops.
shit just doesnt go straight up or down, no matter how extreme the news/event/situation
There is some method to this madness. I sold a bit of SPY at the pre-market -1%, still long some ES. Of course, by the open all the losses were erased. Typically when I get an urge to jump in momentum the market is about to reverse, and when I'm too scared about being long mean reverting assets, they reverse