Buy low or high

Discussion in 'Strategy Building' started by btu12345, Aug 12, 2006.

  1. btu12345


    Scenario 1:
    Buy stock A at low price- it seems to drop lower, then few days later, it crashed!
    Buy stock B at high price - it seems to continue to climb for few days and stay there, and go up still

    Scenario 2:
    Buy stock C at low price - then it rebound, and then start to climb
    Buy high - then it seems to drop few days later, then crashed!

  2. Looking at price, in isolation, may not be the ideal solution.
    Indicators constructed soley from price are unlikely to be much better.

    You need a way to evalute price changes.

    Just my 2 cents...
  3. Sell at high price buy at low price.

  4. Cheese


    Buy low sell high is perhaps the most inane mantra chanted at ET.

    Absolute price or nominal price is generally not relevant. It is only relative price that matters, namely that a price for example moves up 40points (eg YM). What nominal price it goes from and what nominal price it arrives at is irrelevant; it is only the move that matters. If that example upmove is bought at the bottom it makes no difference if the buy price is regarded as low or high.

    And another thing, it is a big bar to a neutral mindset to be paying regard to the actual price. Your only task is to correctly anticipate or predict where price is going to go, up or down, when you enter each trade.
  5. Old and maybe ancient trading rules:

    Buy high. Sell higher. Stop loss. Follow the trend. Keep the bet small. Stick to the method.

    Every method that I remember testing shows losing trades. Losing trades are a normal part of trading. I deal with losing positions by stopping losses.