The Elusiveness of It All

DDR

DDR

Hi All,

At the risk of being labelled "hindsight trading". I'd like you to look past this for the moment.
My point is this, " Why are we not still short from when the original signal was given".
(In this example the DOW JONES) see chart
On this note I realize we all trade differently, some are day traders some are swing and exit rules vary. But if the real money is in catching trends then why is it most are simply watching the move down ?
Hats off to those short and holding from close to the top if you are please speak up and add your story.
Unfortunately this post is written from one traders point of view so I can't encompass everyone but as the title states why was this move so elusive when from history this pattern has surfaced many times. (Double top / distribution)
Simple really but I will admit I am one that did not catch even 10%. I feel a bit naive posting this but am looking forward to feedback on what has happened to many traders around the world (constantly missing great opps)
I'm aiming this post to being proactive for valid conversation and not demeaning to anyone.

Peace
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DDR said:
Simple really but I will admit I am one that did not catch even 10%. I feel a bit naive posting this but am looking forward to feedback on what has happened to many traders around the world (constantly missing great opps)
I'm aiming this post to being proactive for valid conversation and not demeaning to anyone.
More...
Trust me, you will likely miss it again in the future. This isn't something that you can learn by asking advice and suggestions from your fellow ET posters.
 
schizo said:
Trust me, you will likely miss it again in the future. This isn't something that you can learn by asking advice and suggestions from your fellow ET posters.
More...
Yes I understand your point, trading is an individual thing, you either show a positive PnL or you don't. You either learn by your mistakes or you continue losing.
I'm not quite in the losing category more like selling too soon then lamenting later. Still I'm interested in hearing from anyone has gotten in on the retest and still short, surely I'm not the only one selling too soon.
 
Do you hear shorts bragging about catching this move, if not, why not?
Maybe because they got burned all the way up from the 2009 bottom... 6 awesome down-days per year(s) does not a good bet make.

If you go up one or two timeframes, what is the overall trend?
Sorry, I don't know how to catch these moves, and some probably do, but do you really want to try? If you don't find an edge, patience can be one.

Good question though. If market tanks, why not go short from here? Sorry, out of my league. If I did, I would prefer to do it when market is not already extended to the downside, at tops, which historically has been a losing bet for years now (*cough* QE *cough*).
 
Simples said:
Do you hear shorts bragging about catching this move, if not, why not?
Maybe because they got burned all the way up from the 2009 bottom... 6 awesome down-days per year(s) does not a good bet make.

If you go up one or two timeframes, what is the overall trend?
Sorry, I don't know how to catch these moves, and some probably do, but do you really want to try? If you don't find an edge, patience can be one.

Good question though. If market tanks, why not go short from here? Sorry, out of my league. If I did, I would prefer to do it when market is not already extended to the downside, at tops, which historically has been a losing bet for years now (*cough* QE *cough*).
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About the shorts and shorting I thought I would put it out there to see if anyone was a trend trader that caught that move. When you say 6 days is not a good trade bet. I also mentioned that this type of thing has repeated in the past. Just my opinion but taking a 10,000 foot view of price/ market in question could be the better way to go for some. Then of course waiting for the right moment to put your toe in the water then add as a position moves in your favor. From my observation this is how a trader can make their money work for them. Of course this requires extreme patience, discipline, risk management and non emotive mindset. Maybe I've answered the question
 

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There's an old saying on Wall Street that bonds are smarter than stocks.
If they are, then the probabilities of convergence are skewed toward stocks tanking.

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fhl said:
There's an old saying on Wall Street that bonds are smarter than stocks.
If they are, then the probabilities of convergence are skewed toward stocks tanking.
Your post is an interesting one because I've wanted to know more about inter market analysis I should pick up the J Murphy book on it.
I've heard that bonds can precede equities moves so you might be right on. Feel free to elaborate on this inter analysis if you can. I have my own signals but as mentioned in my very first post a trader can see a signal but he also needs to follow through on every aspect of his plan whether that means taking a loss or taking his target. Set and forget and stick to it.
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DDR said:
Hi All,

At the risk of being labelled "hindsight trading". I'd like you to look past this for the moment.
My point is this, " Why are we not still short from when the original signal was given".
(In this example the DOW JONES) see chart
On this note I realize we all trade differently, some are day traders some are swing and exit rules vary. But if the real money is in catching trends then why is it most are simply watching the move down ?
Hats off to those short and holding from close to the top if you are please speak up and add your story.
Unfortunately this post is written from one traders point of view so I can't encompass everyone but as the title states why was this move so elusive when from history this pattern has surfaced many times. (Double top / distribution)
Simple really but I will admit I am one that did not catch even 10%. I feel a bit naive posting this but am looking forward to feedback on what has happened to many traders around the world (constantly missing great opps)
I'm aiming this post to being proactive for valid conversation and not demeaning to anyone.

Peace
More...

I'm not sure if your question is exclusive to Elitetrader.com but I've seen many trend traders call that top in real time. Some still holding and others have been Shorting (in and out) down to where price is currently at.

Yet, the ones I do notice that are still Short since "near" the top via one trade (not in and out), the commonality is that they aren't relying heavily on TA and instead put a lot of weight on issues involving FED, China, Oil and stuff.

These are also traders with deep pockets and committed along with having what I consider to be those crazy large stops or crazy large profit targets. Yet, they have poor win loss ratios and seem to be heavily dependent upon that one gigantic trade to make their year in profits.

Therefore, you aren't going to see day traders holding a position that long. Also, you may not even see swing traders hold a position that long because they tend to do days to several weeks. In contrast, you see those position traders or what I call long term traders that hold positions in some ETF like trading instrument highly correlated to the index or futures because if its futures you'll be force to close and then re-open the position upon expiration dates.

So yeah, most miss out holding those types of long time span positions because most traders are losers and because most traders don't tend to hold positions that long. Once again, these guys are using a lot of stuff (either no TA or with TA) to keep them in positions like that and they are well educated about the impacts of things like FED, IMF, ECB, Oil, Gold, Bonds, Geo-Political, Other key markets.

Also, its not just this market...take a look at the Oil charts top...same reason why these types of trades caught that top and still Short. They usually aren't the ones trading Crude Oil CL futures or Brent Oil BRN futures due to the turnaround on expiration. Instead, they are the ones trading and ETF like trading instrument that's highly correlated to Oil...allowing them to maintain that position without moving in and out.

I know one guy that had 3 big losses in Oil in long term position and then he caught that top in a correlated ETF...he's still Short. It has easily cleaned up those prior losing trades and is giving him the trade of the decade for him. Yeah, he uses TA but its not even close to what else he uses for his trade decisions.

Another issue involving trades like that...diversity. Those that tend to catch trades like that, most likely its not their only trade position. Thus, they've diversified and have other positions...most likely in different markets.

All of the above relates to issues involving Behavior Finance. The minds of the typical trader and investor is not wired for long term large profitable trades...our subconscious fights it. In contrast, when its forced upon us via "behavior" such as an investment or trade we don't need and don't care about the ups and downs...only then can we catch those big investments or big trades.

Simply, if you want to catch big trades like that...you're going to need to change to trading instruments appropriate for such (they got a big unusual reason for trending), change your trading style, change how you view the markets and change how you view money in general...behavior finance.
 
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I've never understood the TA crowd. I think as humans we are biased by the last segment of the line and what that would have meant - or did mean - to our bottom line.

And I'm certainly no TA aficionado, but tell me - given the chart in the first post, why isn't everyone going long here? Why aren't those two lower end spikes a "double bottom"?
 
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