Some people don't trade for the trend, they go for tops and bottoms instead because that way they can try multiple times with very tight stops. A trend trader will only short once the uptrend is broken but by the time he enters the trade his stop will be much larger; it's a matter of preference.
Very true, illiquid. While I generally try to trade with the trend, I will also buy and short exhaustion which is countertrend. If you're fairly nimble and have some good strategies, you can catch some low-risk entries and use tight stops like you indicated. Sometimes you may only hold for a day or so unless you think the trend has, in fact, reversed. Another option is to scale out.
I can feel your fear, and your are looking for someone to ease you. Imagine what will happen to you will QQQ breakout from $40 it might go to 45$ and you will cover because of pain, and that's when market pull back to some where around 35$. Remember, wallstreeter know that public is expecting QQQ not to hit $40 and they do just to opposite, and that's when majority of short seller will cover and we will have new rally on the way to around 43-45$ still it's time to buy. But i'm nuatural
I agree completely. It doesn't matter if you buy/sell strength or weakness. You are always trading probabilities. It is your skills, knowledge and experience that will determine the long term outcome. But in the current situation why not buy a pull back instead of selling a top? With a stop-loss of 3.5% he is probably aiming for QQQ@34.00, so he is betting that the trend will brake, this is not a 2-day correction against the major trend to take quick advantage of... So in fact he is calling a top in a 9-month trend. That's what puzzles me I am not saying that he is wrong, I wish him good luck, I just wanted to know his motives to put such a trade. If his motives are correct then he is right, no matter what will happen
First of all, I would not risk 75% on anything at one time short or long. Secondly, if you look closely at the dow chart you can see that it is positioned in break-out mode. If it tops 10,722, there is no overhead resistance until the 11,000 area. If that happens, it will definitely pull the Nasdaq up. You do what you want to with it. Just my opinion.
Dude... You own a farm. That's great! Where? If you have a farm, why would you want to bet it on a short? Even if you win and the Nazz disappears, you are up one more farm. IMHO, if you bet the farm going long, you have an unlimited upside to the number of farms you will be left with when you take your trade.
Maybe you're right about the top here. Doug Kass thinks so and has posted as much in his trading diary. Everybody has an opinion. This market has been a short killer. I'd be pretty careful, and use proper money management. If you "bet the farm" you won't have the opportunity to become an "extraordinary" person and that loss will haunt you for a long time. Good luck.
This type of thinking is a sure road to ruin..... Absolutely no good can come from it in anyway, even if you are right this time, it will build one of the worst habits a trader can ever have.....Opinion and Bias. I really hope you reconsider this position.
You have presented no argument, evidence, or premise for your belief that Monday will mark a top of at least short term duration.
I am short 500 QQQ myself. I was 3000 short during Friday but I could not dare carry all overnight. I am not a hero I suffered a big intraday drawdown but I recovered most of it. I look for 1-2 down days to cover around 37 and I would reenter if we continue farther down. Fridays high is my stop. If I lose then I have to decrease my size until I go over drawdown Hamb