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I have to agree whole heartedly. there is one other fact, and that is, if you
understand how to trade you can make money shorting an up market and going long a down
market. The perfect contrarian. The prime example is my own. For some reason I had
taken a distinct dislike to Lockheed stock. Not really bright, but true. I shorted
Lockheed from $42 to $90 and went out and bought a new Jaguar with the profits.
Granted that was 1979 and things may have been a little less volatile at the time.
A.J. Carisse wrote:
> GREHERT@xxxxxxx wrote:
>
> > You are absolutely right! Why would anyone want to go against the underlieing
> > trend when following the trend gives you a powerful and necessary edge... and
> > you can't be profitable without an edge.
>
> I've been away from this group for quite a while - this seems like a good one to
> jump back in on.
>
> The way "trend" is going to be defined in a given situation is dependent wholly on
> the timeframe referenced - while one may say that a market is in an uptrend over
> the last few weeks, this of course does not mean that this is the case over the
> last few minutes, say. It is never the case that something moves in one direction
> only for very long, rather we have moves in both directions of varying magnitudes
> and lengths. So - do we mean here that we ought to follow trends when longer term
> trends are going the same way? Again, this is relative - I could be using a 5
> tick chart for the longer term chart, and trading the 1 tick. Whether this is
> even a good idea *universally* is at the very least highly questionable. For
> instance, if you are looking to buy pullbacks (or short rallies), you most often
> would be fading the recent bias, and this can be a powerful strategy if applied
> with the right amount of skill.
>
> Presumably, your "edge" would be to spot patterns that have a favorable
> probability of repeating, regardless of the periods that are referenced, and
> whether or not the longer term bias is for or against your desired position.
> There is no reason whatsoever why an instrument cannot be played both ways
> regularly, providing it has sufficient volatility and trades in a manner that
> profitable patterns can be discerned. This would certainly be true for S+P
> futures.
>
> Regards,
> A.J.
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