The biggest trader I know is a guy that only goes long and since I was struggling lately I was wondering what people thought about this. I've always wondered why banks and hedge funds only go long and when I asked him why he only goes long, he simply said "The market goes up 70% of the time so you are putting the odds in your favour". Simple but so true. Maybe it's time to try and be a bull only?
Or maybe have 70% long positions and 30% short positions. Alternatively, you could try some sort of dynamic allocation system, perhaps based on the ratio of the number of stocks making new highs to that of stocks making new lows. I'm sure you can think of some other possibilities.
I no longer trade (but am toying with the idea of coming back to the game). The biggest trader that I know is also long-only intraday. His strategy dictates this constraint i.e. taking scalp entries but riding positions for as long as possible. Clearly scalp entries on shorts necessarily dictates that you are entering against near-term momentum, due to the uptick rule.
In a strongly trending bull market, maybe. Besides, when the market falls, it tends to be hard and fast which can wipe out a lot of long-side profits quickly. :eek:
Nazz, Some of the best long trades are bear market rallies. I remember the e-mini SP rallying 90 handles in 30 minutes in 08's bear market. Normally 90 handles is seen as a storming month for the SP. Most of these HFT's I bet are long only too, you can see how they manipulate the bids only so I'm assuming HFT's are long only traders too.
I think the short trade with big amount could be make more profit than long trade, If you can catch the chance that you have. Nothing is impossible,
Most of my intraday programs are long only relating to futures contracts. I might just not have a good eye for shorting though. I have 1 combo (l & s) - rest are buy programs. I think it might have a lot to do with your outlook in general and not anything too particular.
HFT Algo's are long only. I've never met a HFT trader in my life, but you can see them manipulating the bids constantly, which you do not see with the offers. That's how you know they are always long. I guess system traders just automatically think about buying systems first and not selling ones, which I guess is natural. But you can understand the hatred HFT's generate, most of which I feel is justified. Most locals have been caught badly short over the last two years and all they see day in day out are HFT's manipulating the price upwards. I've seen a lot of good, experienced traders wiped out and propriety trading firms across the land are empty. The market has changed dramatically and one must adapt or die and maybe being a long only trader is the answer.
agree with you, Joovenile, the market is changing dramatically so long trade or short trade would be good if you have a sensitive brain with it .
I agree that going short isn't something that you should be doing 50% of the time, it's a losing game. I mostly am always long, or will have a few short positions or short calls to hedge. Also, in regard to HFT, it's good for people who have brains- creates more opportunity.