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What happens to a market when everyone is long?
- Thread starter flipflopper
- Start date
haha exactly... a little mean for your friend though..
1200 ES!
1200 ES!
Quote from FB123:
95% of traders are not long. There have been lots of people warning about divergences and looking for a top. Heck, we had a thread about that running just yesterday. My clueless friend has been trying to pick the top all the way up. When he stops buying the inverse ETF and starts going long, I'll know that the top is in.
Quote from trading_time:
haha exactly... a little mean for your friend though..
1200 ES!
He's never traded before, and thinks he knows what he is doing. Doesn't want to listen to my advice, when I told him how hard it was going to be. He went short at 965 and again at 995... has to learn the hard way I guess!
These are things gurus will tell us, so it must be right.
market is overbought
most retail long
shorts squeezed
----------------
here are the things gurus really have NO clue about.
what overbought means and how to make money off this non-sense
what any retail trader is doing, and how to make money off it
and the true % short and how to make money off it.
-------------------------
here is what I know.
words like overbought and sold are worthless.
so quit being a vacuum behind your computer and admit you really don't know anything.
market is overbought
most retail long
shorts squeezed
----------------
here are the things gurus really have NO clue about.
what overbought means and how to make money off this non-sense
what any retail trader is doing, and how to make money off it
and the true % short and how to make money off it.
-------------------------
here is what I know.
words like overbought and sold are worthless.
so quit being a vacuum behind your computer and admit you really don't know anything.
Quote from TheBestGuruEver:
These are things gurus will tell us, so it must be right.
market is overbought
most retail long
shorts squeezed
----------------
here are the things gurus really have NO clue about.
what overbought means and how to make money off this non-sense
what any retail trader is doing, and how to make money off it
and the true % short and how to make money off it.
-------------------------
here is what I know.
words like overbought and sold are worthless.
so quit being a vacuum behind your computer and admit you really don't know anything.
I agree. Overbought and oversold are generally used in technical analysis in the context of oscillators, like stochastics. So when the stochastics reach the upper end of their range, you can say that the market is "overbought", and vice-versa. In a range-bound market, this means there's a short-term top or bottom and it's safe play a reversal.
The only problem is, oscillators don't work at all in a trend. In a trend, oscillators will get overbought and stay overbought for a long time. In fact, in a trend, "overbought" is often a good time to go long for some more upside. (There is even a trading method that uses this phenomenon, called a stochastic pop.)
What's funny is that the time when the words "overbought" and "oversold" are most often used in the media is when the market has already moved some distance in a trend - precisely the moment when those terms don't work and are misleading.
These words have no use at all in the context in which they are most often employed and are therefore best ignored.
I saved this from a website in 2006, funny:
Old Hong Kong sardine dodge. (During a famine in China, a Hong Kong merchant sold a sardine can filled with mud to another merchant, who sold it at a profit to a third merchant who sold it at a profit to a fourth. When merchant No. 5 discovered the fraud and complained, No. 4 had a comeback: "Why did you open the can?")".
Old Hong Kong sardine dodge. (During a famine in China, a Hong Kong merchant sold a sardine can filled with mud to another merchant, who sold it at a profit to a third merchant who sold it at a profit to a fourth. When merchant No. 5 discovered the fraud and complained, No. 4 had a comeback: "Why did you open the can?")".