Short DAX at 7740
- Thread starter ASusilovic
- Start date
A bear mkt is officially defined as a 20% fall from a previous peak,
such
as was
seen in the DAX this morning at 6,500
However, by looking at the 9 bear markets we have seen since April
1970,
and
using the DAX as our model, it is possible to see that mkts continue
very
poorly
after entering a bear phase. In fact it is an average of 10 months and
minus
25% of performance until the bottom is achieved. See below
Date of entry into bear No. of months til bottom Index move
to bottom
Apr 1970 19 -19.0%
July 1973 16 -18.6%
July 1986 19 -26.0%
Oct 1987 3 -22.0%
Aug 1990 5 -15.0%
Oct 1992 0 0.0%
Aug 1998 1 -19.0%
Mar 2001 24 -63.0%
such
as was
seen in the DAX this morning at 6,500
However, by looking at the 9 bear markets we have seen since April
1970,
and
using the DAX as our model, it is possible to see that mkts continue
very
poorly
after entering a bear phase. In fact it is an average of 10 months and
minus
25% of performance until the bottom is achieved. See below
Date of entry into bear No. of months til bottom Index move
to bottom
Apr 1970 19 -19.0%
July 1973 16 -18.6%
July 1986 19 -26.0%
Oct 1987 3 -22.0%
Aug 1990 5 -15.0%
Oct 1992 0 0.0%
Aug 1998 1 -19.0%
Mar 2001 24 -63.0%
Quote from ASusilovic:
Here is a piece of paper from Deutsche Bank ( unfortunately only in German language ), anlayzing consequences of the subprime crisis. At page 32 is a funny headline question ( translated ) :
"Have U.S. mortgage bankers been on drugs ?
http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000218883.pdf
correct. they were using steriods to increase their leverage beyond imagination. they're like those bucket shops that offer 400:1 margin and advertise it as the holy grail to became millionaire in a couple of days. wtg us bankers.
They will be triggered depnding on what type of orders they are.
These moves today of 100s of points within minutes (there was around 150 points move within 5 minutes) make me want to trade so badly, but it is against my rules to trade when book is so thin and spread is unreasonable, so I am on side lines salivating.
So sell Volatility, or ? !
I am not sure about stop limits since I do not use them. I have mine as stop market orders, so it always gets me out sometimes with small slippage. Obviously on days like today you can easily get killed with market orders.
I would guess that if you have stop limit on exchange, and the price trades through it, you might still be in position.
Also some exchanges do not even support stop market, what they do instead is stop limit with very large brackets, so it acts like stop market.
This morning was incredible to watch, and I guess for brave ones to trade.
Regards,
redduke
It makes me feel inadequate and frustrated, to watch all these points go by, and not a single one is mine 
At the opening, after the initial drop and the very small consolidation, i had my finger on the button to sell, but somehow failed to press it...that went on for two hours....
Fibs, pivot points, oscilators and S/R have worked the same as any other time...just a LOT faster and with huge ranges....
one of you mentioned salivating...i had to put a bucket under my chair
Does that show trading inmaturity, or is it something that most of you expirienced traders went through as well ?
At the opening, after the initial drop and the very small consolidation, i had my finger on the button to sell, but somehow failed to press it...that went on for two hours....
Fibs, pivot points, oscilators and S/R have worked the same as any other time...just a LOT faster and with huge ranges....
one of you mentioned salivating...i had to put a bucket under my chair
Does that show trading inmaturity, or is it something that most of you expirienced traders went through as well ?
Hi Baron193,
I would say it shows maturity. All these moves looked great onn charts, but reality is a bit different. The speed, spread and slipage could have killed positions before they went into green. The only way to trade intra day on such days is to increase size of stop loss by a lot, but as we all know it can easily play both ways.
Markets will be here tomorrow and the following day. We are here to trade amd make $ consistantly, and staying out on days like these is the right thing for most of us.
Regards,
redduke
I would say it shows maturity. All these moves looked great onn charts, but reality is a bit different. The speed, spread and slipage could have killed positions before they went into green. The only way to trade intra day on such days is to increase size of stop loss by a lot, but as we all know it can easily play both ways.
Markets will be here tomorrow and the following day. We are here to trade amd make $ consistantly, and staying out on days like these is the right thing for most of us.
Regards,
redduke