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

Share this post


Link to post
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.

Share this post


Link to post
4 hours ago, dmedin said:

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

Here's my chart of the S&P 500, can't really see much difference, can you?

image.thumb.png.867ff2bda6835620a556769ca776275a.png

Share this post


Link to post
7 hours ago, Guest ShortS&P said:

I think you will regret.

 

Only one direction!

p03jg38f.jpg

Share this post


Link to post

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

Share this post


Link to post

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?

Share this post


Link to post
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.

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Member Statistics

    • Total Topics
      7,880
    • Total Posts
      41,774
    • Total Members
      52,033
    Newest Member
    Brenny
    Joined 15/12/19 17:21
  • Posts

    • I like the fact that the analysts focus purely on money and profitability without getting too political.  That's what we want to see.  (After all, why are any of us here except to make money ...)
    • I just notice Nick Radge is also on number 178, I've not listened to this one but could be useful for anyone looking to build a new system. 178: The Blueprint: Create a simple trend following system w/ Nick Radge https://chatwithtraders.com/ep-178-nick-radge/
    • Gold apparently.  Anything with 'mass public participation', i.e. anything that a lot of other traders are applying EWP to.  I'd be very surprised to see anyone who has been using any kind of TA successfully for 10 years come on this board, after all 'why should they' lol when they can sell analysis for a living instead of giving it away for free.
×
×