It works? Getting into an elevator going down, if you're going up?

Instead of buying at the bottm trying to find the next microsoft, short stocks that overextend themselves (in a bear market every rally is an overextension techincally...)


Here is an attachment of my favorite illustrative stock Empire Resources (ERS) about why P/E ratios mean shit and why you should not try to think stocks magically come back.

 

no, but your account can

 

Too risky

Stocks may keep going up without limit, as happened to those who tried to short the dotcom bubble.

 

Not risky at all. Unless a trader takes numbers out of his/her ass the style I described is way less risky than any form of day trading. You just need to wait until the market itself tells you of a weakness (technical not fundamental of course) and then you pounce. Knowing when not to trade is just as important as knowing when to trade.

Because most people here are so consumed by getting a few "ticks" on ES they can't appreciate positional trading skill so I stopped posting predictions on stocks that last a few days and require patience.

 

Thanks TraderZones for explaining this clearly to idiots who think bottomless pit equates to a stock trading at zero.

 

watch elevator's lights pattern until you get the hang of it before getting in.

 

Awesome post CR. Really I think this is the best thing you have ever posted.