Short

We've gone over this again and again on these threads -- some ppl like to ride the trend (the middle of a move), others like to catch the turns, it's a matter of how good one is in timing and how comfortable one is with the size of the stop necessary to trade either way. I've seen and heard of many ppl who've succeeded or blown out using both methods, so I don't think it's necessary with statements like "top calling will destroy you" etc.

Nobody sells unless he thinks a "top", however relative, is forming, and nobody buys unless he thinks prices are going to move up, so in either sense everyone tries to call it, whether before or after the fact. Some people think they can catch prices on the way down before they rise, as in "buy when everyone else is selling", and this usually leads to short-term drawdowns; other ppl prefer to wait for evidence of a rebound, but by the time it looks safe to buy, the stop-out point is larger and in a sense the risk may be greater, all depends.

But I think no one can claim one way or the other works better, just pick whichever method suits your personality.
 
Quote from illiquid:

We've gone over this again and again on these threads -- some ppl like to ride the trend (the middle of a move), others like to catch the turns, it's a matter of how good one is in timing and how comfortable one is with the size of the stop necessary to trade either way. I've seen and heard of many ppl who've succeeded or blown out using both methods, so I don't think it's necessary with statements like "top calling will destroy you" etc.

Nobody sells unless he thinks a "top", however relative, is forming, and nobody buys unless he thinks prices are going to move up, so in either sense everyone tries to call it, whether before or after the fact. Some people think they can catch prices on the way down before they rise, as in "buy when everyone else is selling", and this usually leads to short-term drawdowns; other ppl prefer to wait for evidence of a rebound, but by the time it looks safe to buy, the stop-out point is larger and in a sense the risk may be greater, all depends.

But I think no one can claim one way or the other works better, just pick whichever method suits your personality.
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Excellent post.
 
Quote from Trend Fader:

I am not picking a top and I not a rookie trader.

The dumb money waits for a drop then they try to short the rally... when the pro is covering into the drop. When we get the rally the big $ has already been made.

I do not trade based on simple patterns or cute little charts. My trading is soley based on figuring out the tape and forming the right short term bias on the market for the next few days and weeks..


--MIKE
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Sorry but you are wrong.

All the newbs and hacks try to catch the perfect top and then cover as soon as the price makes a small bounce back (if they are right that is). With your current position, you will either cover if the market goes up even a little or cover with small profit when and if it makes a small drop and then bottom pickers come in.

If you are expecting a market crash, good freaking luck cause unless some breaking news crisis pops up, it's not happening. As stated for all previous top pickers, you reward is not high enough for your risk. In fact, you are most likely wrong and will get stopped out. If you are right, your reward is not even high unless you plan out to hold this position for months, waiting out all the other short covers. So hence, if you are willing to do that, why risk entering this position now against the trend, when you can easily wait to enter once the trend turns.

What you said about not looking at the chart is simply stupid. All I have to do is look at the chart and see that gap. I'm assuming that is enough for all the beaten bears to regain life again and start shorting the hell out of this market again. In other words, you may not be dumb money but you definitely are not smart money when every other trader is trying to do the same exact thing.

You say the tape gives you all you need to know? I read the tape, but whenever it comes to Dow components or any stocks strongly influenced by the market, tape reading means squat if the market is strongly bullish or bearish. Period. You are trying to short Russel 2000 Index. Who cares what the tape says if the market turns strongly bullish. Just like any Dow component, during a rally it can go up on ridiculously low volume and take 10 times the volume to even do a down 50% retracement.

And finally, why would you come and post this on ET with barely any explanation besides:

"Just because the market has been in an uptrend past year doesnt mean we still will go up much from here. "

Yeah just because it went up it must come down. That thinking would have destroyed any trader during the past year.

"I do not trade based on simple patterns or cute little charts. My trading is soley based on figuring out the tape and forming the right short term bias on the market for the next few days and weeks.."

I already covered this. Basically this is barely a reason to even take a trade like this. You might, just might, wanna look at the chart and maybe some fundamentals. I dunno, but for me when talking about a major index, it would take a whole lot more than the tape to make a decision of either long or short. Your thinking is equivalent to a gambler betting the farm on tails in coin flipping because the last 3 flips were heads.

You are just asking to be flamed. Besides, if you are such a super trader why would you disclose your gem trades? The best traders never do that.
 
Quote from Mecro:


All the newbs and hacks try to catch the perfect top and then cover as soon as the price makes a small bounce back (if they are right that is). With your current position, you will either cover if the market goes up even a little or cover with small profit when and if it makes a small drop and then bottom pickers come in.
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I've seen you state this a few times, but the only reason one would try to catch a top or bottom (at least for me, the only reason that makes it worth the risk) is to be able to hold through all the subsequent pullbacks and keeping one's position for a longer term trade, whereas those who try to chase after the turn is in will be more likely to get shaken out.

Let's say you wait until "confirmation" that the top is in, and then you go short; then you see the market rallying hard on a retracement bounce -- who do you think will be in a more comfortable short position in that case? Unless you think all traders are the "take small profits but sit through your losses" type, I would guess that it's those who try to short after everyone agrees the market has topped who would have a more difficult time maintaining their position.
 
Quote from waggie945:

( and I guess it needs repeating )

The Trend is YOUR Friend.

Why people wish to make it their Enemy is beyond me!
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Today was another great day. My bias was short so i kept on fading the market. Payed off.. I was on the right side today.

The gap allowed to me short at high price and cover some of it to lock in gains and still maintain short bias.


--MIKE
 
Quote from waggie945:

( and I guess it needs repeating )

The Trend is YOUR Friend.

Why people wish to make it their Enemy is beyond me!
More...

there are many ways to make money trading. trend following is only one way. some ways are more risky than others and more painful short term but that doesnt mean they dont work.
 
In a few days teh market probably will end up testing the 50ma. I will continue to maintain my short bias.. and by fading each rally and cover some into the drops I will make nice coin.

Mecro.. say whatever u want about bullshit TA.. and the trend is your friend crap. All I know is that 90% of all online trades lost money in 2003.. which was an awesome trendy year.

Most of TA is useless and trend spotting is a losers game at best. Everyone on ET says its the only way to trade.. but in reality look who I am talking to.. mostly a bunch of losing traders ( no offense).

If I am right about market going down here in the short run.. and i continue shorting the bounces I will clean up. I am not calling for a melt down or a financial collapse. Just saying we have a high chance of testing 50ma again right now.. And the Naz might slice through.


--MIKE
 
I have no problem "scalping" against the Trend, but it takes an extremely disciplined individual that is a seasoned professional.

As Mecro pointed out earlier, someone that makes the following statement does not appear to be a "seasoned" professional:

"Just because the market has been in an uptrend past year doesnt mean we still will go up much from here. "

Yeah just because it went up it must come down. That thinking would have destroyed any trader during the past year.

True
 
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