Jump to content

Long/short bias and when to shift your perspective


Recommended Posts

Hi all,

As a solely long trader at the moment which in an uptrend as we see in many markets right now, it works.  However, one day retracements will become a reversal, meanwhile its not easy to know that in advance so you might still be blindly trading long when its actually turning into a downtrend.  The key thing for me would seem to be that you need to realise this as soon as possible and shift to short trading to avoid too many losses-easier said than done.  Anyone got any experience or advice on this?  The price moving below and not breaking above a long term moving average doesn't seem to be a bad indicator, lower lows etc but i'm just looking at past data.  If you've been so biased to long trading its kind of hard imagining switching to the other side.  I never wanted to have a strong bias to long or short but when i wasn't i struggled to make any profit although that was for day trading which i've given up on.

Thanks for any input

 

Link to comment

"The Trend is your Friend, until the end" - but all the "experts" out there fail to tell you how to work out when it is over! (they don't know the answer to that)

You just need to devise some form of method that you're happy with here

Depends what you're trading - if its the SP500 Index then its natural bias will always be UPWARDS - due to the mechanics of what it represents and all that pension/Investment fund money sloshing about

If you have a long method that works - then it shouldn't constantly show up to trade during a down period, you might get caught out once or twice but we all do

 

 

Link to comment

If we take the 2008 decline on the US500, I've attached a daily chart of this. You'd be better off shorting but of course you don't know that it's going to be an ongoing decline and the risk potentially is that you switch to a short preference and then the market does revert back to an upward trend. The market stayed below the 100 day MA for an extended time so maybe that's an indication of which way to trade but I know it's not always reliable. Probably also helps if you use a trailing stop at least to minimise damage.

Screenshot_20210615-164948_IG Trading.jpg

  • Like 1
Link to comment

You need to get hung up on them, because they happen - I know for a fact that during 2007-09 bear market you could have traded long and made money, because I did it, but the easiest route was shorting and down

Get a chart WEEKLY of any forex market or commodity - go back as far as poss and notice the big turns/swings - much more volatile than the SP500 - there's a reason for that 

I always say anyone who's making a packet from trading or Investing on SP500 etc go have a crack at the forex or commodity markets - the stock markets natural direction is UPWARDS - especially buy and holders, fund managers would get ripped apart on the forex + comm markets

OK - Its totally Impossible to know EXACTLY what the SP500 is going to do on a daily/weekly basis, but it WAS possible to know that a) 2007-09 was going to be a bear market before 2007 even arrived and b) that the market would stop around the level it did.  But this is ultra advanced and very few people are bothered about it

I've written a thread on Time Cycles on here - it covers what the SP500 is doing in terms of TIME - if you understand it and think about it, it will put you ahead of 99.99999% of traders out there, because these really big corrections and crashes do not happen out of the blue - they are predictable and forecastable with high reliability years in advance 

Look at the chart below - think about what I'm saying:

In 1909 WD Gann said that markets always seek their gravity centre, the half way point - that's the 50% level to you and I

Traders go on about fib levels - the 50% level is clearly much more important a level 

What if you KNEW 1974, 2003 and 2009 should be low points? What an opportunity both long and short!

This is why I researched and spent hundreds of hours on Time and Time Cycles for - I missed 2000-2009 because I didn't know what I know now, but I know when the next ones are and I have no plans of missing them

These are key once in a lifetime turn points that don't happen often

So what I'm trying to point out is that on the stock market the big plunges like 07-09 aren't the norm, but they do happen with very regular intervals, that will catch a lot of people out during certain cycles that the market moves through.

with regards to identifying bear markets - yes using a MA to say price below this level is bearish, but it's already bearish as it approaches the level if using price formations such as lower lows etc

You don't need to know what I've discovered about time to be able to trade successfully - I was just intrigued if it was possible to be able to time the really big turns etc as I'd prefer to to know if it was

517.thumb.JPG.04619755b71e290cb4c7a6b7a1a3d79f.JPG

 

 

  • Like 1
Link to comment
13 hours ago, u0362565 said:

If we take the 2008 decline on the US500, I've attached a daily chart of this. You'd be better off shorting but of course you don't know that it's going to be an ongoing decline and the risk potentially is that you switch to a short preference and then the market does revert back to an upward trend. The market stayed below the 100 day MA for an extended time so maybe that's an indication of which way to trade but I know it's not always reliable. Probably also helps if you use a trailing stop at least to minimise damage.

5 Best Trend Indicators That Tells You the Direction of the Trend (tradingwithrayner.com)

Link to comment

Thanks both, with the time cycles i struggle to believe that these big events can be timed.  But if in history it shows that every x years something big happens then that's surely more than coincidence.  The problem i have with that is i don't understand why they would repeat like this-i know a lot of things repeat in markets! But with crashes i cannot see any logical reason why they would conform to this because aren't they triggered by unexpected world events and how can they be timed, perhaps its my lack of understanding of how the markets work.  Anyway its certainly interesting.

I often look at forex markets out of interest and i just can't see the patterns at all, they look all over the place to me but i have upward trends ingrained in my retinas so maybe no surprise!

Thanks for the article Caseynotes, some good general tips, nothing particularly groundbreaking there but does at least make you realise everyone is basically using the same tools and very few have higher levels of insight.

 

 

  • Like 1
Link to comment
23 minutes ago, u0362565 said:

Thanks for the article Caseynotes, some good general tips, nothing particularly groundbreaking there but does at least make you realise everyone is basically using the same tools and very few have higher levels of insight.

Nothing new in basic principles since Dow, Wyckoff and Gann a hundred years ago. The key is not to find something new but to not make the 1001 potential mistakes.

Maybe correlations rather than patterns. Fundamental analysis for direction and targets but technical analysis for how price goes about getting there.

 

ccs1.PNG.2fca7859922ab3b6e7644a3a0bbc8b07.PNG

 

  • Like 1
Link to comment
21 minutes ago, u0362565 said:

Thanks both, with the time cycles i struggle to believe that these big events can be timed.  But if in history it shows that every x years something big happens then that's surely more than coincidence.  The problem i have with that is i don't understand why they would repeat like this-i know a lot of things repeat in markets! But with crashes i cannot see any logical reason why they would conform to this because aren't they triggered by unexpected world events and how can they be timed, perhaps its my lack of understanding of how the markets work.  Anyway its certainly interesting.

I often look at forex markets out of interest and i just can't see the patterns at all, they look all over the place to me but i have upward trends ingrained in my retinas so maybe no surprise!

Thanks for the article Caseynotes, some good general tips, nothing particularly groundbreaking there but does at least make you realise everyone is basically using the same tools and very few have higher levels of insight.

 

 

99.999% of people don't understand how the markets work, let alone the TC's, but they still manage to make money from so don't dismiss your knowledge - the markets are doing things most people haven't a clue about - I'm not prepared to divulge the cause nor the mathematical formula to work out the TC's, if I did you'd be able to see very clearly the repetition - I know exactly where you're coming from, I'm the most sceptical person you will ever meet  about the markets, so I know its hard to understand or believe

They repeat because humans buying and selling still make the same decisions now as they did hundreds of years ago - human behaviour is very predictable, even in different economic times

There's always a reason attached to plunges so the media and fund management world can say this caused X but they never tell you in advance - I've published elsewhere in advance the dates so to dispel anyone challenging I did it after the event 

Forex - EXACTLY - they are highly erratic - they work to different Time cycles than the stock market, which is why they act differently - but the overall laws of the market regarding swings, price action etc still apply and can be exploited to our advantage

The 50% is the balance point - the laws of physics apply here - markets respect a lot of the laws of physics and mathematics in certain ways, which is why the TC's work etc

It happens on all time-frames - If the market is abiding by the laws of physics for an up trend then if price crashes down through the 50% level of the prev range/swing then it should revert back up through that level purely down to the laws of motion and physics 

373.thumb.JPG.021253baa4ddd7176c2cf82449fd01e1.JPG

 

 

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • The first half of 2024 saw the debut of spot bitcoin exchange-traded funds (ETFs). However, several lesser known cryptocurrencies such as BGB (annual increase of 100%, market value of US$1.6 billion); **** (annual increase of 90%, market value of US$1.5 billion), WIF (annual increase of 1,306%, market value of US$2.1 billion); PEPE (annual increase of 815%, market value of US$5 billion) also gained significant attention during this period. The overall market value of all cryptocurrencies rose by $661 billion in the first six months of 2024. BGB, the native token of the Bitget cryptocurrency exchange, was among the top 10 best-performing cryptocurrencies with a market capitalization over $1 billion in the first half of 2024. The token saw a 100% increase in its price during this period. While the exchange token is not considered a "meme coin" like some of the other top-performing tokens on the list, its significant price appreciation suggests growing investor interest and adoption of the exchange and its associated cryptocurrency. As one of the world's largest crypto exchanges, The exchange performance reflects the broader bullish sentiment in the crypto market over the first six months of 2024.
    • PixelVerse, a platform designed to transform virtual interaction is gaining traction amongst the Metaverse, Gaming, NFT and DEX enthusiasts. Out of curiosity I digged dip to get a grasp of what the project is really about.  At first glance, Pixelverse gives an aura of an encompassing ecosystem that meets digital realm needs. For instance, Metaverse enthusiasts bask in the euphoria of using PixelLaunch, a launchpad product that also offers access to innovative Metaverse and gaming experiences. The Gaming, NFT, and DEX counterparts are engrossed in PixelHouse, PixelNFT and PixelSwap; accessing a thrilling/rewarding gaming experience, an open NFT marketplace and a customised DEX respectively. Pixelverse could offer immersive virtual world experience especially for $PIXEL holders. Understandably, this vast token utility has the community anticipating the imminent listing on Bitget. Which feature are you looking to explore most?
    • Q2 Netflix earnings preview and share price analysis.   Source: Adobe images   Shares Netflix Revenue Income Streaming media Stock market   Written by: Axel Rudolph FSTA | Senior Market Analyst, London   Publication date: Wednesday 10 July 2024 17:06 Netflix's second-quarter 2024 earnings preview: the fight to stay on top As Netflix gets ready to announce its earnings for the second quarter (Q2) of 2024, investors want to know if the popular streaming service can keep attracting lots of new subscribers, make the most of its ad-supported plans, and remain the top streaming platform. When will Netflix share its latest earnings information? Netflix will reveal its April through June 2024 financial results after the stock market closes on Thursday, 18 July 2024. Another Netflix revenue increase seems to be on the cards Netflix expects its revenue to increase 16% year-over-year (YoY) to $9.49 billion in the second quarter of 2024 but analysts predict Netflix's Q2 revenue will be slightly higher at $9.53 billion. In the first quarter of 2024, Netflix's revenue was $9.37 billion, up 15% from the prior year. Earnings are also expected to rise Regarding earnings, Netflix forecasts net income of $2.06 billion, or $4.68 per share, for the second quarter of 2024 whereas analysts estimate Netflix's Q2 earnings per share will reach $4.74. For comparison, in Q2 2023, Netflix reported a net income of $1.48 billion, or $3.29 per share. Netflix's net income in quarter 1 (Q1) 2024 was $2.3 billion, or $5.28 per share. Further revenue growth in the pipeline YoY Netflix expects 21% FX-neutral revenue growth in Q2. Paid net additions are likely to be lower in Q2 than Q1 due to seasonal trends but global average revenue per membership is predicted to increase YoY in Q2 (on an FX-neutral basis). In Q1 2024, Netflix added 9.3 million net subscribers, grew global paid memberships 16% YoY to 269.6 million, and increased average revenue per membership 1% YoY (or 4% on an FX-neutral basis). Engagement remained solid despite changes like paid sharing. Netflix sales revenue chart   Source: TradingEconomics For Q2 2024, Netflix forecasts $2.52 billion in operating income and 26.6% operating margin, versus $1.82 billion and 22.3% in Q2 2023. This compares to Q1 2024 operating income of $2.63 billion and operating margin of 28.1%. LSEG Data & Analytics analyst Netflix recommendations LSEG Data & Analytics data shows a consensus analyst rating of ‘buy’ for Netflix – 11 strong buy, 18 buy, 16 hold and 1 sell (as of 10 July 2024).   Source: Refinitiv Netflix – technical view The Netflix share price, up over 45% year-to-date, is approaching its November 2021 record high at $700.99 which, since it was made near the major psychological $700 mark, probably won’t be easily overcome. Netflix monthly chart   Source: TradingView.com A rise above the $700.99 all-time high would allow for the $750 region to be in focus, though. On the daily chart, the Netflix share price has been range bound since late June but last week did rise to its current July high at $697.49, close to the $700.99 record peak. The upside is being supported by the May-to-July uptrend line at $678.42 below which good support can be spotted between the May high and the late June and early July lows at $633.78 to $662.30. While this area underpins, the short-term uptrend will remain valid. Netflix daily chart   Source: TradingView.com For a medium-term top to be formed, the Netflix share price would have to fall through its $626.44 June low. Slightly above this level, the April high at $639.00 would be expected to offer support in such a scenario.
×
×
  • Create New...
us