Why Do People Buy At A Top?

Covertibility · Oct 21, 2013

Should You Buy at New Lows? Or New Highs?

History says yoo bai moar!

vinc · Oct 21, 2013

Quote from tradingjournals:

If you understand why people buy at a top

how do you know it's a top?

Visaria · Oct 21, 2013

bot google today at 1012

xelite777 · Oct 21, 2013

Quote from a5519:

Buying new highs with a proper money and trade management is a profitable trend following strategy.

Studies show otherwise.

For example buying a new 52-week high on the S&P 500 futures is a losing proposition.

In fact you wouldn't believe all the nonsense most traders take for granted.

kid.fx.cross · Oct 21, 2013

Quote from xelite777:

Studies show otherwise.

For example buying a new 52-week high on the S&P 500 futures is a losing proposition.

In fact you wouldn't believe all the nonsense most traders take for granted.

so then the opposite is true?

selling the S&P 500 on a new 52 week high is a winning proposition?

NoDoji · Oct 21, 2013

Quote from xelite777:

Studies show otherwise.

For example buying a new 52-week high on the S&P 500 futures is a losing proposition.

I'd love to see the studies that prove buying new highs is a losing proposition.

Buying a new 52-week high on the S&P has been a winning proposition for just about everyone so far.

Three of the most profitable swing trades I ever had were buying right after new highs were printed. What's funny is that one of those trades was a thinly traded stock and I accidentally placed a market order instead of a limit order, and immediately caused price to run more than 3% into new 52-week high territory. It continued to make new highs for a few days before a shallow pullback.

BobbiDigital · Oct 21, 2013

Buying highs is part of the game, what the higher TF's context is and what price does above that high should be your concern.

xelite777 · Oct 21, 2013

Quote from kid.fx.cross:

so then the opposite is true?

selling the S&P 500 on a new 52 week high is a winning proposition?

There is an old saying in Wall Street : "Amateurs buy 52-week high breakouts - and breakouts in general - , the pros fade them".

Enough said for the time being ...

xelite777 · Oct 21, 2013

Quote from NoDoji:

I'd love to see the studies that prove buying new highs is a losing proposition.

Read "How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn" for example, it will show you numerous studies that show exactly that, among other things.

Quote from NoDoji:Buying a new 52-week high on the S&P has been a winning proposition for just about everyone so far.

Sure, any idiot can make money during an uptrend. But backtest that theory with 30 years of S&P 500 data and see for yourself...

mokwit · Oct 21, 2013

Quote from tradingjournals:

If you understand why people buy at a top, could you share it?

They weren't paying attention so they did not hear the big bell the exchange rings to announce that the market has topped.