Long Vs Short

Discussion in 'Trading' started by John9999, Jun 18, 2018.

  1. speedo

    speedo

  2. Simples

    Simples

    In general: One may treat long and short the same. Some ETFs are inverse.

    But, for stock markets, and depending on the market, long and short side are statistically different. Short tends to be fast, brief and high vol, while long tends to drift slowly upwards on lower vol. For any extreme case, there are many cases in between also, that tend to not work the same. Thus one need to learn how to "read the market", and be adaptive to what's happening when.
     
    #12     Jun 20, 2018
  3. userque

    userque

    There are too many factors involved to give a meaningful direct answer to your query. But, all things being equal, and generally speaking: odds favor the long side.

    Thought experiment:

    Consider a typical and random chart. Imagine picking two random dates on that chart. The first date being entry and the second being the exit. Repeat this simulation many thousand times--considering a new random chart each time.

    Ask and answer for yourself: What are the odds that the exit price is higher than the entry price? That's the bias.
     
    #13     Jun 23, 2018
  4. Markets don't crash up. ;)
     
    #14     Jun 23, 2018
  5. Snuskpelle

    Snuskpelle

    Shorting stock indices during the right circumstances is comparatively easy, it's just that the right circumstances for shorting them are very infrequent and it takes patience to wait for them (during which you're better off being long, unless in a pronounced crisis market like 2008).
     
    #15     Jun 23, 2018
  6. mlawson71

    mlawson71

    I can only speak for myself, but moves to the downside usually seem more clear to me than the ones to the upside.
     
    #16     Jun 24, 2018
  7. True but timing shorts is a lot harder since markets go up longer-term. This is an interesting article with statistics about SP500 from the same expert I mentioned in another post.
     
    #17     Jun 24, 2018
  8. In the book Long Term Day Traders, a number of very successful traders are interviewed by the authors:

    Linda Bradford Raschke (the only woman to make Jack Schwager's famous Market Wizard book) - is reported as making 70% of her money from the short side.

    Oliver Velez (Pristine Capital) - says "The short side is very lucrative. Really true master traders have the majority of their profits come from the short side, because stocks have a tendency to fall faster than they rise."
     
    #18     Jun 24, 2018