If everyone traded 'long only' they'd increase their odds a fair bit. Especially trading things like SPY, DIA only. Maybe a few nice moving stocks.
Looks like your strategy has a short bias as you seem to lose money when the market rallies. Just an observation.
Bull/bear, over time we HAVE to go up. It can't be any other way. Those that understand, know this. 40k on dow jones is guaranteed. Even if we have some troubles along the way, people will do better trading 'long only'.
Investing or trading ? big difference , surely traders looking to make a living cant hold and wait ...
The market does have a bias to go up over time as companies are always striving to make a profit. However if you buy at the top you might be in trouble unless you're prepared to wait for several years and average down to bring your price down.
I already cut my trade size on my shorts by 75%. That's what is saving me right now, my short position was significantly bigger just a couple month ago. This latest down move at least gave me a chance to close some of this. I can't just trade the long side. We are so overbought right now, this truly feels like 99 to me (the smallest sell off is immediately bought). For all the guys that traded long in 99/y2k, they are still looking to break even 14 years later. Unfortunately as a mean reversion trader I do really well in chop, but I get really hurt when we have these extended one sided moves. Don't ask how my 2008 trades looked, I felt like I was the only bull back then. I appreciate your thoughts !!
It's true that the market has an upside bias (otherwise you'd be crazy to invest) but nothing like we've seen the last couple of years. I'm not even @ a gambler's fallacy here, most positions are put on neutral even after a run up like this but it eventually turns into another short as we keep pushing higher.
Right now that's very true. What's strange is that even my auto-trades lose money, which in theory should be neutral. Having said that though it's probably not that strange since momentum stocks shine in this environment and I'm typically short those stocks and long the dogs in these trades.