Good luck. Weird things happen in the market. If you looked at the Nasdaq anytime really from about November of 1999 all the way out the only "logical" thing to do was be short, but most people would have been destroyed doing it. The real estate bubble, again was obvious for a long time before it really crashed. There are ways and methods for cathing tops and limiting your risk, but if your asking about them on the Internet you should probably observe some more, study and learn, and then maybe next time this type of opportunity comes about you can take advantage of it, and that will happen again.
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I am seriously thinking of shorting oil long term
- Thread starter Sky123987
- Start date
Good luck. Weird things happen in the market. If you looked at the Nasdaq anytime really from about November of 1999 all the way out the only "logical" thing to do was be short, but most people would have been destroyed doing it. The real estate bubble, again was obvious for a long time before it really crashed. There are ways and methods for cathing tops and limiting your risk, but if your asking about them on the Internet you should probably observe some more, study and learn, and then maybe next time this type of opportunity comes about you can take advantage of it, and that will happen again.
One might consider reducing the extreme risk in the oil futures market by using options. At least, with options, you can quantify the risk that you're willing to accept.
http://masteroftheuniverse.wordpress.com/
http://masteroftheuniverse.wordpress.com/
don't do it
I am not much of a trend trader, have shorted the energies more times past four years than i can remember since crude hit 26.70 in Jan 1997. One thing about markets and history, they repeat themselves. Sugar hit 66.00 in Nov 1974 and 4.5 years later traded at 6.05. Everything has limits of too high and nothing goes down to zero.
Many times have lost on the energy futures short trade, but recover the loss and made profit on the options I purchase at same time. The slippage and the gaps would have been incredible risk if not for the insurance of the overpriced options.
Many times have lost on the energy futures short trade, but recover the loss and made profit on the options I purchase at same time. The slippage and the gaps would have been incredible risk if not for the insurance of the overpriced options.
Today:
Oil is so insanely priced. and you know Bush is leaving office. I don't it to be 2009 and gas is 1.50 / gallon, having missed another grand opportunity.
The strategy of shorting markets that are going up is MUCH more often than not a losing one. Oil may very well be overpriced and subject to huge investment flows and even some manipulation but none of those things (or even all of them together) are any indication that prices will break in a timeframe that you are trading in.
Read (or more likely reread) the classic Reminicensces Of A Stock Operator. His cautionary tales directing you to place shorts after market generated information confirms the obvious are absoloutely the way to go.
Don't look to catch the first 10%/15% of the decline or the last chunk. Grab that much more predictable (hence safer) chunk of the middle of the move. If you end up with 60 or 65% of a big move pat yourself on the back and let the amateurs grab there 95% once or twice in a lifetime and lose day in and day out because they are shooting crap.
Good plays take their entries from market generated information. Let it break and watch it be unable to come through the top on a subsequent rally (or two) and then short into that "heavy" market. Not because you are predicting a top but because you are convinced you have seen the top and the market has recognized. Don't crystal ball it. You have an opinion now let someone smarter than you or me (market action) tell you if you are right.
Tommy
Oil is so insanely priced. and you know Bush is leaving office. I don't it to be 2009 and gas is 1.50 / gallon, having missed another grand opportunity.
The strategy of shorting markets that are going up is MUCH more often than not a losing one. Oil may very well be overpriced and subject to huge investment flows and even some manipulation but none of those things (or even all of them together) are any indication that prices will break in a timeframe that you are trading in.
Read (or more likely reread) the classic Reminicensces Of A Stock Operator. His cautionary tales directing you to place shorts after market generated information confirms the obvious are absoloutely the way to go.
Don't look to catch the first 10%/15% of the decline or the last chunk. Grab that much more predictable (hence safer) chunk of the middle of the move. If you end up with 60 or 65% of a big move pat yourself on the back and let the amateurs grab there 95% once or twice in a lifetime and lose day in and day out because they are shooting crap.
Good plays take their entries from market generated information. Let it break and watch it be unable to come through the top on a subsequent rally (or two) and then short into that "heavy" market. Not because you are predicting a top but because you are convinced you have seen the top and the market has recognized. Don't crystal ball it. You have an opinion now let someone smarter than you or me (market action) tell you if you are right.
Tommy