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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
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