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In a message dated 98-08-18 23:52:32 EDT, you write:
<< Does it have to be either/or? Since there are always some stocks moving
up and some moving down, have you considered having both longs and
shorts, perhaps in accordance with a running average of the
Advance/Decline ratio?
The conventional wisdom (i.e. the trend is your friend) is, and my limited,
though rather expensive experience, has been that it is better to be on the
right side of the market. That is, long when the market is moving up and
short when it is moving down. Conceivably, one could develop an indicator
based on market breadth and aportion their portfolio among long and short
positions on that basis. No offense, but, my reation to that strategy is "why
bother". Whether the market is moving up and I want to be long or the market
is moving down and I want to be short, I can always find a lot more
opportunities than I have money to use to my advantage.
Arguably, I could optimize my profits by holding long and short positions at
the same time, however, there is a great deal of collective market wisdom that
says don't do it. Refer to "Reminiscences of a Stock Operator" by E. Lefever
and W. J. O'Niel's discussion of the M in CANSLIM for two examples of that
wisdom.
That's just my opinion. It's your money and when I am cleaning your pool
while you are away vacationing on the French Riviera you can say "I told you
so".
Dan
Pocatello, ID
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