Jump to content

There was only one direction in which to trade S&P 500 in 2019.


Recommended Posts

Long - buy and hold - for the entire year.  Dips clearly predicted by MA crossovers.  Upon the low of each dip the correct thing to do was to add longs.  Advanced warnings of the bottoms provided by the 5MA and turning slopes of 20 and 50.  Anyone shorting the S&P 500 in 2019 is a 'goddamned fool' trading against the trend.

Buy and hold (and adding additional longs) vs. being a muppet using one minute charts.  Which would you choose?

2019-08-29_01-22-50.thumb.jpg.f9d0aa8c9e12922997f2cb1cfd421215.jpg

  • Like 1
Link to comment
Guest ShortS&P
1 hour ago, dmedin said:

Long - buy and hold - for the entire year.  Dips clearly predicted by MA crossovers.  Upon the low of each dip the correct thing to do was to add longs.  Advanced warnings of the bottoms provided by the 5MA and turning slopes of 20 and 50.  Anyone shorting the S&P 500 in 2019 is a 'goddamned fool' trading against the trend.

Buy and hold (and adding additional longs) vs. being a muppet using one minute charts.  Which would you choose?

2019-08-29_01-22-50.thumb.jpg.f9d0aa8c9e12922997f2cb1cfd421215.jpg

I think you will regret.

Link to comment

Hindsight is 20/20 as you said before @dmedin  So the question is, if you were going to trade the SP500 now, do you buy and hold?

Buy and hold sounds like an investment strategy to me rather than a trading strategy, albeit that as a longer term trader I do hold positions for some time if we are in a strong run.  As a swing trader, which is mostly what I am, the play was to buy after Christmas (which I did, after cashing my shorts on reversal signals) and cash out in early May (I actually cashed earlier than that, which was a mistake).  Then buy again in June and cash out and go short in July, I did the latter not the former.  If you bought the dip in June and held you would have been stopped out on the July reversal.  I have posted recently elsewhere that I went Long on the strong pull back after the reversal rally in early August and have swung successfully a few times so far and am now Long again but this is all tactical for me as I believe the odds favour an end to the Bull sooner rather than later.  Unless there is a confirmed breakout rally buy and hold will not work.  Typically traders do not buy and hold anyway.

So net, trading is not as simple as it seems in retrospect and other than when we get into long strong wave 3s or Cs (trend following territory), swing trading is a better strategy than buy and hold.  It is also worth noting that the markets tend to spend more time in consolidation phases than strong trends, hence swing trading is more often than not the right approach.  A trading strategy will have an exit as well as an entry part to it, even if this is something as simplistic as a trailing stop, which I never use myself.  In order to make a profit you have to cash out.  Buy and hold is not a trading strategy and for my money, at this part of the cycle, it is not even a credible investment strategy either.

Various market greats, such as Buffett for example, all say 2 things (they say many things but they all agree on these 2 at least):

  1. Buy low/sell high (reverse for Shorts naturally) - you have to sell to make money (outwith dividends of course)
  2. Don't lose money - this is about money management and risk management

Crack these 2 simple concepts and get control of your emotions and you can make it work.  Fall into the trap of retrospective recriminations and false lessons learned and you will not succeed. 

  • Like 1
Link to comment
2 hours ago, dendyver said:

Hi dmedin

I assume you are using simple moving averages?

Assuming you are acting on the 5 and 20 crosssovers, what is the role of the 50dma?

Did you not think to short the May correction?

 

I did think to ... but I didn't.  My approach should have been to use the daily and set the stop above the ATH, instead of fannying about with hourly and minute charts with tight stops that inevitably get taken out.

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
  • General Statistics

    • Total Topics
      23,037
    • Total Posts
      95,427
    • Total Members
      43,652
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    P09Professional
    Joined 29/09/23 12:41
  • Posts

    • Liquidity is either buy or sell side and liquidity Purge...CHoch change of characters is simply MSS market structure shift. Confusing 
    • Hello, Hope this finds you well. I have prepared the calculator. Attaching the same for your perusal.  https://1drv.ms/x/s!AlwK9pqvvQo_aWChCgsxdHMqpLw?e=0zW5co   The yellow cells are the inputs and the color coded region is the P&L.  As mentioned and highlighted, 80 trades with win rate of 50% would lead to P&L of 1000.  Similarly, the other sheet in the calculator is based on the profit and loss per trade for given trade number and win rate.   The cells can be changed as per scenario to get insights.    please let me know if any clarity is required. 
    • Nikkei 225, FTSE 100 and S&P 500 try to recover into month end Outlook on Nikkei 225, FTSE 100 and S&P 500 as the oil price, US yields and greenback retreat from their lofty heights. Source: Bloomberg  Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 29 September 2023 11:36 Nikkei 225 stabilizes as September draws to an end The Nikkei 225 stabilizes into month-end despite Japan consumer morale falling to a six-month low as better-than-expected preliminary industrial production and a positive close on Wall Street aided Asian stock markets to stem their September falls. The Nikkei 225 thus managed to stay above its Thursday low at 31,665.4 which was made close to the 25 August low at 31,563.2. Were this level to give way in October, the August low at 31,251.2 would be in focus. Immediate resistance to contend with is the 22 September low at 32,167.9, followed by the mid-September low and the 55-day simple moving average (SMA) at 32,396.5 to 32,464.9. While below this area, bearish pressure retains the upper hand. Source: ProRealTime FTSE 100 bounces off support into month end The FTSE 100 is trying to build on Thursday’s Wall Street led gains following dovish comments by Federal Reserve (Fed) members Goolsbee and Barkin and better-than-expected UK revised business investment numbers. The 200-day simple moving average (SMA) at 7,650 is thus back in sight. Potential stumbling blocks above it can be seen at the 7,688 June high and also between the 7,723 July peak and the current September high at 7,747. These highs will need to be bettered for the psychological 7,800 mark and the 8 May high at 7,817 to be back in play. Minor support sits at Wednesday’s low at 7,553. A fall through this week’s low at 7,523 would open the door to the psychological 7,500 region. Source: ProRealTime S&P 500 ends nine straight day fall A retreat in the oil price, greenback and US yields amid dovish Fed talk and sharply lower revised consumer spending have helped the S&P 500 stem its nine straight day fall to 4,239 and led to a small positive close on Thursday. While this week’s low underpins, the late June to August lows at 4,328 to 4,337 will be eyed. First, though, Thursday’s high at 4,318 will need to be exceeded. Below the September low at 4,239 lies the major 4,214 to 4,187 support area which consists of the early and late May highs and the 200-day simple moving average (SMA). Source: ProRealTime
×
×
  • Create New...
us