Fighting the Tape

K

KGB

Just curious if anyone has any ideas why one fights the tape. I see myself and others in my trading group call the moves correctly, only to try to buy a selloff 2,3,4, or more times on the selloff. At the end of the day, we ask ourselves" I knew it was going down today, why was I so persistant on making money on the long side at least once. Is it the need to be right, or some self-destructive personality trait? Any ideas or insights will be appreciated.
KGB
 
Quote from KGB:

Just curious if anyone has any ideas why one fights the tape. I see myself and others in my trading group call the moves correctly, only to try to buy a selloff 2,3,4, or more times on the selloff. At the end of the day, we ask ourselves" I knew it was going down today, why was I so persistant on making money on the long side at least once. Is it the need to be right, or some self-destructive personality trait? Any ideas or insights will be appreciated.
KGB
More...

Do you fight it on both sides, or on selloffs only?
 
Two possible answers. One is that fading apparent trends has been smart of late and over time the market tends to chop more than trend.

Second, you chose a handle named after the intelligence service of a failed empire (I assume)... i.e. maybe you do have a thing for bucking the trend mentally.
 
I think it's difficult for younger traders to sit short and have faith that sellers will re-enter the market as soon as a "significant" offer is filled or as soon as they find themselves out of the money....it is an understandable fear considering that bids have been wiped out on the way down and there is no time for offers to establish themselves as limits when the impulse of a seller is to sell....now......just hit a bid.....I believe in order to short, conviction in position and adherence to discipline is required to be succesful in this post-bullet world......Best fortunes to all.


grimer11
 
p.s. "kgb"......how are ya boris?.....it's Chris formerly of Madison with you...I wish you guys luck in your transition from "bullet junkies" to a more disciplined, albeit boring style of trading...I know you, most of all, can do it.


grimer11
 
Quote from KGB:

Just curious if anyone has any ideas why one fights the tape. I see myself and others in my trading group call the moves correctly, only to try to buy a selloff 2,3,4, or more times on the selloff. At the end of the day, we ask ourselves" I knew it was going down today, why was I so persistant on making money on the long side at least once. Is it the need to be right, or some self-destructive personality trait? Any ideas or insights will be appreciated.
KGB
More...

Ahhh so you're one of those traders that constantly upticks against a falling price. You keep trying to bounce a short that WILL NOT bounce since there are no covers. You guys are nothing but noise to the stock's general direction.

I know that once I stopped trading against the tape, I became much better. I also stopped trying to trade like you do and that helped me a lot.
 
Quote from KGB:

Just curious if anyone has any ideas why one fights the tape. I see myself and others in my trading group call the moves correctly, only to try to buy a selloff 2,3,4, or more times on the selloff. At the end of the day, we ask ourselves" I knew it was going down today, why was I so persistent on making money on the long side at least once. Is it the need to be right, or some self-destructive personality trait? Any ideas or insights will be appreciated.
KGB
More...

What happens is that you hesitate to short at the beginning of the sell-off and then you watch the sharp move down in disbelief.
Now you feel like s**t because you missed a nice smooth move down. Voices in your head convince you that this can't be happening and market will bounce immediately. At this stage, you're in your in your own little world completely ignoring the 9 signals which scream sell-off is not over yet. But instead, you get locked to that one single signal that looks like sell-off is over. I think at this stage, your judgement is clouded and perhaps deep down you're punishing yourself for missing out the move. The more market goes down, this effect gets amplified--you might even start getting long with larger positions!

Knowing that you have this problem, and noting this on your trade journal every time you try to catch the falling knife should cure it eventually (if you have enough $$$ to survive).

Chinook
 
Good Call Chinook....

Michael B.


Quote from chinook:



What happens is that you hesitate to short at the beginning of the sell-off and then you watch the sharp move down in disbelief.
Now you feel like s**t because you missed a nice smooth move down. Voices in your head convince you that this can't be happening and market will bounce immediately. At this stage, you're in your in your own little world completely ignoring the 9 signals which scream sell-off is not over yet. But instead, you get locked to that one single signal that looks like sell-off is over. I think at this stage, your judgement is clouded and perhaps deep down you're punishing yourself for missing out the move. The more market goes down, this effect gets amplified--you might even start getting long with larger positions!

Knowing that you have this problem, and noting this on your trade journal every time you try to catch the falling knife should cure it eventually (if you have enough $$$ to survive).

Chinook
More...
 
I think that it's also the old greed factor. I think your trying to catch the bottom of the trend (which is a risky thing to do). You should try to get greedy with patience instead. If you think it's going down try to maximize it. Example was today. Some kick ass traders made bank today. Yet others (even I did it) tried to keep buying trying to catch a bottom. So all I did was help the others buy taking the other side of their trades as they added to their shorts.
 
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