The decision will have to be made on the inside or outside high or low (opportunity cost), you are either in it, getting out of it, or entering, simple but not so at the same time, but wait why not just wrap it in riddles for a few years just so the ones not knowing can work it out for themselves and yet some here implying they've worked it out really haven't. If it really is a matter of the bank account proving one wrong or right how do you know the mega ego "experts" here are not just wasting your time ? In another totally unrelated forum they have a popular saying: photo proof or it didn't happen....
Yep go short but, for some reason, a lot of traders will want to go long. Some will use an indicator, or draw lines on the chart, to try and predict when it will turn around. Others will sit on the sidelines waiting for a bounce. It's the same for a stock which is shooting up. Many traders will want to go short. As TE said "It does not matter one little bit what YOU want..."
So what your saying is you should never try to fade a trend yet for some psychological reason that is what most traders try to do.
Well, ya need to know when the market is oversold and when it's overbought. Just as it's foolish to fade a strong trend, be it up or down, it would be disastrous to buy the top and sell the bottom. BTW are you by chance the OP?
Well this is a silly question as I know. How does one begin to understand a way to identify when it is going down so that one can THEN do the obvious?
It's not what I'm saying. It's what I understand, the obvious to be, that the OP was driving at. Trying to predict turning points certainly lost me a lot of money over the years. That, and risking too much, not realising trading is just another form of gambling.
No, I'm not the OP. I only stumbled on this thread long after the OP had left. It would only be disastrous, to buy the top or sell the bottom, if you risked too much. Bet very small, with a stop, and the worse that can happen is a small loss. I think it was RN who said that, in his opinion, overbought and oversold were overrated.
I believe the OP mostly traded individual stocks. With hundreds of them to choose from it shouldn't be difficult to screen for ones which are going up, or ones which are going down.
For the record... It is possible I've got it wrong about the obvious the OP was referring. But, for me, all the clues point to this. I've never actually tried trading this way. In fact, I haven't traded for quite a long time; the previous failures made me eventually stop (although not soon enough ).
I hope this helps someone. It took me YEARS to understand what OP was trying to say and I finally get it. Here's a parable: On Sept 20, 2000 the SEC settled a stock fraud case against a 15 year old high school student named Jonathan Lebed. His strategy was to buy up large portions of the floating supply of a penny stock and then post 100's of positive misleading and bogus messages all over Yahoo Finance and other stock trading forums. All the messages caused a next day buying frenzy, and Lebed would sell his shares to the duped buyers at astronomical prices. He made close to a $1M before the SEC stopped him. Jon Lebed was no pioneer. Wall Street's best have been doing this same thing for 100's of years. If you go to stock trading forums looking for stock tips and trading advice, you're no better than the people duped by Jonathan Lebed. This is what OP was trying to say. IF YOU WANT TO MAKE MONEY TRADING YOU HAVE TO CONTROL THE MARKET LIKE JON LEBED. OP even mentions CONTROL as some bullshit acronym to give you a hint. THAT IS IT. It's about CONTROL. You don't guess the future, you don't predict the future, you CONTROL the future by attempting to dupe people into buying what you already own at a higher price (so easy a 15 year old can do it). Why is this not obvious to the majority? BECAUSE 99% OF PEOPLE ARE IDIOTS. STOP TRADING YOUR MONEY AWAY DO NOT ATTEMPT TO MANIPULATE. IT'S ILLEGAL! DO SOMETHING BETTER WITH YOUR LIFE