I think what Sig is saying is you can call/attribute it whatever you want in your head, but net net you are either increasing or reducing your position.
That's a pretty epic cop-out! All you need to do is provide a single scenario. Like this, just to make it clear how you'd show such a thing. Day 1 Buy 100 units at $X Day 1 Sell short 100 units at $X Day 3 Sell 100 units at $Y, profit/loss of $0 Day 7 Buy 100 units at $Z, Total profit since day 1 of $0+$Y-$Z - the spread on the unnecessary long position. And now you're flat. And then I show that you can exactly replicate that by: Day 1 Do nothing Day 3 Sell short 100 units at $Y Day 7 Buy 100 units at $A, total profit since day 1 of $0+$Y-$Z And now you're flat just like on day 7 above but actually slightly ahead because you didn't unnecessarily pay the spread twice. Math and logic are wonderful things. Happy to have you point out the fault in my logic? A counter-example? This isn't arguing, this is you facing up to facts and either admitting that the math doesn't work or showing why it does. Are you capable of that? Put up or shut up time. No charts needed only a few seconds to "correct" my scenario with whatever it is I seem to be incapable of grasping.
Mathematically you are right, but for reasons of operational consistency or record-keeping one may prefer to execute and book the activity as two separate trades in separate accounts. I can be swing long or short and trade the same instrument intraday, it's just easier to do this in separate accounts and think of intraday positions and PnL as relative to zero.
Do you think it's true for all values of 1, though? If you have multiple strategies, once in a while these strategies will cross assets between themselves (which, btw, is a good thing usually), but you are only keeping them as separate positions for alpha attribution. Keeping them in two separate accounts is silly - for starters, it means that you paid 2x the transaction costs.
Good point, for really really small 1 particles it may or may not be true, depending on how you look at them.
I would submit that if you can't walk and chew gum at the same time as it relates to something like this then trading might not be a great career fit!
This all seems pretty simple to me. Refer to chart below. Suppose you happen to magically enter a long trade after the Dec 24 low, and this will be a long term hold. So you enter long at A. Now you get to area B. You're still confident in your long term long, but you see a triple top, and want to take a short for a day trade. So you enter short at B. Since you're thinking of this just as a short term play, you magically get out of your short at C. As we can see, the move from B to C (shown in red) nets you 80 points for the short. The long from A to D nets you 360 points. (shown in green) Now it can be argued that between B and C, you are essentially flat because you're both long and short one contract, but because you didn't close out of your long, the loss from B to C is only a so called "paper" loss, and not even really a loss since you're already up. Both of these trades can turn into winners if you exit them just right. If you just wanted to be long, you could have gone from A to B and exited at that triple top (shown in blue) which would net you 200 points. Then you magically get back in at C for a long, and so now long from C to D (shown in purple) would net you 240, and this would get you 440 points, since you didn't sit through that drawdown from B to C. But since you went short at B to C, you got the 80 points from the short, and since you didn't exit the long, you got the 360 points, so in total you would still have 420 from being both long and short. Of course the best possible combination is long from A to B for 200 points. Short from B to C for 80 points. And long again from C to D for 240 points for a total of 520 points. But we all know these turns are impossible to time. Now are you essentially flat between B and C because you are long and short? Yes you are, but because you can't ever time trades just right, it makes sense to be both long and short if you're trading them in different accounts with different holding time frames. If you are long from from A to B and get 200, but instead of going short at B you just exit, and then re-enter long at C to D to net another 240, you end up with 440, which is the same as the long term play from A to D for 360, plus the short from B to C for 80, for a grand total of 440 again. So the short taken does cancel out the exit and re-entry from the long. But because you can't ever time these precisely, I bet that in practice, playing both long and short in different accounts will lead to more profit.
Or you would achieve exactly the same thing if you sold your position at B! And you would achieve exactly the same thing if you reacquired your position at C! There's no "it can be argued" here. You aren't "essentially" flat, you are flat! A loss is a loss, if the instrument is traded at a given price that's the value of your portfolio at that instant in time. Full stop! Imagining that you're somehow in a better position because "it's just a paper loss" is right up there with unicorns and fairies! Massive unsupported logical leap here. By your own math, and by anyone's math with at least a third grade education, you come out with the exact same end result if you simply opened and closed your positions instead of opening simultaneous offsetting positions. Well not exactly the same results, doubling your positions will always be inferior unless you're trading sim with zero commissions and zero slippage. Where exactly is this magic "timing precisely" advantage that doesn't happen by replicating the exact same results without all the extra unnecessary trades? You listed a bunch of steps, which step exactly does this magic happen at and what are the trades?
Perhaps I didn't get my point across well enough. My example was of course the best case scenario. There is no way that for the long term hold you could get out precisely at an intermediate top and not go through the drawdown, and then get in at the exact intermediate bottom again to ride it up on the next wave. So the long term hold makes more sense. But since you feel very strongly about shorting the triple top, it makes sense to make a few points there. If you're wrong about the short, and it turns into a loss, at least you're still long from your swing trade. But if you got out of your long, and it keeps going higher, then you're missing out. So my point is that since you can't time these turns precisely, its better to keep holding the long and try for a day trade short rather than exiting and hoping to time a re-entry perfectly.