difference between tops and bottoms ?

Discussion in 'Trading' started by diversions, Jan 17, 2010.

  1. I have been trading a reversal strategy for about 4 months I have been taking about 2 trades a day.
    I have one set up I know inside and out and I look for it in basically all of the tradable symbols
    Index futures currencies oil gold etc

    I looked into my trade station trade manager and I found that I had a profit factor of 224
    On my longs and 118 on my shorts. I knew I was doing a lot better going long but the disparity surprised me
    My setup cant be back tested because it involves multiple time frames and plenty of subjective interpretation
    I am trying to figure out if I should just drop shorting altogether. Which would make life a lot easier or will things eventually even out ?
    In other words is fading like buying in reverse or is there an innate difference
    I am hoping some one can give me an informed answer as for theorizing I can do that well enough on my own
    Thanks in advance for your time
     

  2. Yes shorting tops are the same as buying bottoms..You want to know why? Well I don't know and I'm sure no one else could tell you in detail.. I just know by studying charts over and over... How long have you been trading? Because reversals are only one way to make money..and on trendy days you will most likely get hurt.. My question is.. If the shorts are working out why would you stop trading them?
     
  3. Handle123

    Handle123

    Yes, there are huge differences between tops and bottoms. Very seldom do congestion occur at tops, whereas on bottoms, congestion is often the norm. And there is reasons why congestion normally occur in bottoms and uptrends.

    Same with Climatic bars are more true at tops than bottoms.

    Younger traders either don't understand about selling short, or think it is Un-American, but all of them understand about buying the market, so uptrends are often congestive or ragged, it is easier to pick off Protective stops in an uptrend.
     
  4. ".and on trendy days you will most likely get hurt..


    once you have learned reversal trading trading you hope for the trend days
    the harder the trend the clearer the reversal point
    it is the slower days when i get hurt
    you ask why not incorporate trend trades
    i have struggled and lost my pants and blew out my account 2 or 3 times depending on how you count trying to catch everything.
    out of all that pain i decided to take the one thing i have learned that showed promise and stick only to that. i also made the parameters as strict as possible. now i look for my setup in many markets - and 4 time frames- and still only get t 1 or 2 setups a day
    some times none
    .
    i would not recommend this type of trading to anybody but it is what i have leaned in my journey and i am sure as hell not going to mess with new stuff as long as this keeps working
     
  5. Redneck

    Redneck


    OP

    In an up trending market/ stock/ index you can make money going long or short – but the odds favor making more money going long

    In a down trending market/ stock/ index you can make money going long or short – but the odds favor making more money going short


    Always know the environment (the bigger picture – aka context) you’re working in – and set your shorter term expectations/ stops accordingly



    BTW – Price drops, on average, 2½ times faster than it rises – I will always have shorting in my arsenal – just as I have long and flat…. But there are times I will not short… or go long for that matter...


    eta - Is fading like buying in reverse - No, Yes, Maybe...

    You could write a whole volume on that question and still not do it justice... Specific context is what you need to help provide the proper answer


    Regards

    RN
     
  6. I agree with RN. You've only been doing this 4 months, and for the past 4 months the market has been going straight up. Why would there even be a question as to why longs worked out better than shorts?
     
  7. If you are going to base your career on tops and bottoms good luck.. Real professionals dont really care about tops and bottoms.. You are probably getting lucky because it has been slow lately.. Wait until things get wild again..

    Like i said before.. tops and bottoms are one way to make money but it shouldnt be your main strategy... But how can i teach someone thats already having alittle success? I cant... because you arent going to listen to me because your success is blinding you right now... so im not here to teach you but i am here to warn you..
     
  8. I am a short term traders, very. On friday, I traded AMZN long while it was strong in a weak market, through a new high. Then I made money on the short side, late in the day, with a short through the low.

    The debates can do on and on. However, the right set ups are not arguable. The numbers / probability are actual confirmed numbers. I would say that I make money almost 60% of my trades. However, that is enough to make a good living. This can be accomplished when profits are greater than losses. This can only be accomplished with discipline to cut losses.

    Brendan P. Byrne
    Trader
     
  9. If you're making money on your shorting, why would give it up? Apart from that, to some extent, one side hedges the other (think 9/11 market action)

    I pair trade and I shift my bias intraday (close to flat overnight). While it's somewhat of an arbitrary indicator, when my longs are outperforming my shorts, that pushes me further to the long side and vice versa.
     
    #10     Jan 17, 2010