I see many people are quiet here and there are no "LOL" or "Free money" postings anymore. Am I right? I did not believe that we are in the bull market but I feel that things are overdone now. Personally I got out of my shorts fast and lost good amount of money on bad option bets. I see investors are scared of getting in and automatic sell orders and margin calls are kicking in.
It seems that many people are losing money
- Thread starter hajimow
- Start date
(1) Welcome to October. Smart traders look forward to this month.
(2) People lose money in any market. Always have, always will.
Now any company that reports extremely good results tumbles. I have seen periods that companies announce that " we are proud to a announce that we are bankrupt"!! and their share surge!!. Investors don't look at the result, they just do what they are biased to do or planned to do until it gets overdone and market changes the direction.
If, over the past 5 years, you had bought the S&P (as represented by SPY) when SPY and VIX were at current levels of a 10 day RawK of stochastic, you would have profited nicely with 23 trades. 82% would have been profitable with a win/loss ratio of .84. You would have made, on average, about 1.7% on each trade lasting about 10 days.
Your exit would have been the first down day after the 10 period RawK of SPY crosses 60. A simple but effective strategy that shows, in my opinion, the value of buying into fear.
This has also proven historically to be a good buying opportunity of S&P components with strong fundamentals that are also undergoing distribution with the overall market.
Fear is a great trading opportunity. The best.
Those with years of experience in watching these developments welcome the fear. Those with any guts are getting ready to back up the truck and load up.
As for me, I'd love to see a couple hundred more points shaved off the dow. Then it gets interesting.