|
PureBytes Links
Trading Reference Links
|
Scheier
Good points. With the market collapsing today and my brother in a plane
flying down for a meeting regarding our web site, I turned off the TV, never
even fired up the computer and went to the mall and bought myself that new
KitchenAid Mixer.
We never know which direction the market is going to take. Like you said,
we don't care. We're traders, period. Up, down, sideways, upside down,
doesn't matter. As long as we have movement we're happy. We strictly trade
probabilities. We know, based upon the last fifteen years or so, that our
system is right at least 70% of the time, and for the last few years at
least 80% of the time. Our trading is built around those probabilities.
When we make a trade, we never know whether we'll be in that trade one day
or a month. We really don't care. As long as we maintain that 70-80%
probability of success, we'll make money.
Now, when we're early or wrong, it does get painful, but since we don't draw
any money out for expenses, it doesn't hurt as much. We did make an error
entering our equity positions for this trade. We should have been going
long the other half of our equities tomorrow morning. We still feel pretty
good about the trade. I think the market has factored in the Fed's interest
rate increase already and we're do for a bounce.
Now our system is comprised of two major components. One is a home grown
momentum signal which we couple with an overbought/oversold indicator. It
appears to work quite well. Let's see what happens with this trade. It's
possible that this is the one that brings our average down to 75%. :)
Guy
Paranoia...you only have to be right once to make it all worthwhile!
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]On
Behalf Of scheier
Sent: Wednesday, May 10, 2000 3:39 PM
To: metastock@xxxxxxxxxxxxx
Subject: Re: Going Long
I had to laugh at your sarcasm and your point is well made. But I think
Jean
Jacques' original question is actually a fair one, just poorly worded. If
he
had said, "Why are you buying in a downtrend" instead of using that
debatable
term `Bear Market', his point would have perhaps been better made.
And I think the question is a good one, and fair game for any of us who
stick
our necks out with possible trades. For with the series of trend
continuation
patterns we have had in the Nasdaq off the recent high--first, the 3 day
Gann
Pullback, and then the A-B-C correction--the opportunities for selling short
and
going with the trend have far outweighed the chances of picking the right
stock
to buck this--yes, let's call a spade a spade--Bear Market.
As for absolutely positively knowing ANYTHING before taking a trade, that
is, of
course, absurdly impossible and would prevent us from ever being able to
even
pick up the phone to place a trade. But I'll go farther, you don't have to
assume you know which way the market is going before you position yourself
with
an order. In fact, most of the mistakes traders make come from the
assumption
that, in fact, they know which way the market is going when they take a
position.
Then how does one trade without such a trend opinion? You simply identify
behavior patterns, and position yourself around them with stops. If they
trigger, go with the movement. If they do not, shrug your shoulders and look
for
the next set up. The best traders I have ever met in the market place
always
have this attitude: I don't care which way it goes, and I don't need to know
ahead of time.
When I finally arrived at a trading method that could incorporate this
attitude,
a HUGE weight was taken from my shoulders. Stress disappeared. And now I
often come back to the office in the morning not even remembering whether I
had
taken a short position or a long one in a particular market from the
previous
day--that's how little I now think about my positions at night. If you're
having trouble putting the markets away at night and forgetting about your
trading; if you find yourself fantasizing at night about how your trades are
going to come out and where your profits will be should your daydreams come
true; or if you find yourself worrying at night about your positions and
find
you don't sleep well because of them, then you probably took the trades
based on
the assumption that you knew which way the market was going to go, instead
of
letting the market take you with it at key points around a behavior pattern.
Just some food for thought....
Scheier
Kent Rollins wrote:
> Since you're new to the list, maybe you'd like to tell us how you know
> absolutely, positively, beyond any shadow of a doubt that we're in a bear
> market. While you're at it, how long will it last? Also, will the small
> caps, banks, foods, and drugs that have been in a bear market for the last
> year or so (2 years in the case of small caps) participate in this bear
> market? If oil prices stay high, will the oil stocks turn down also or
will
> they remain bullish? Where will the market be when the bear market ends?
> What about wheat and sugar?
>
> Kent
>
> -----Original Message-----
> From: Macromnt@xxxxxxx <Macromnt@xxxxxxx>
> To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
> Date: Wednesday, May 10, 2000 1:02 PM
> Subject: Re: Going Long
>
> I am new to this list but I wander what makes someone go long in a bear
> market. Is it an attempt to catch the bottom (it's always a risky attempt)
?
>
> Jean Jacques Chenier
> Global Management
> www.trendoscil.com
|