I have an ethical question, which I find difficult to deal with. When short the overall markets, or long in oil or gold stocks, isn't there a kind of hidden wish that something bad happens in the world in order to benefit from that event? I am currently trading two swing systems which are exclusively long, so at least I do not have the short situation, but quite often my systems are long stocks which will benefit from bad news. In a way one could relate this to politicians which probably hope that something goes bad when their opponents are in power (This works for all parties, I suppose). Any thoughts on how traders deal with this dilemma?
your wish, or lack there of has nothing to do with an event occuring. be concerned about how you will use your profits in a constructive manner, instead. regards, surf
I hear ya ACM... just about everyone long natty or crude during hurricane season has got to subconciously "cheer" when a hurricane begins to develop and head toward the gulf. It's really a catch 22 as the last thing anybody wants to see is one of those hurricanes destroy homes/kill people... that's why one must separate their feelings from their trading... you don't buy crude because you want a hurricane to hit, but you might buy crude because you know the probablity of such an event is high. Some would consider you anti-american if you short the market... i disagree.
that's why those long energies ahead of hurricanes have been crashed on a regular basis. look how the mkt reacts to terrorism and there u have it.
Life is all about the struggle to survive when catastrophe strikes. Do not feel guilty for obeying your survival instincts. Being short in some sectors does not mean you know a disaster will happen. You are just being prepared whereas most people think nothing bad will happen or they think they can rely on others to bail them out of hard times. People profit being long in sectors that recover from a fall as well, so there's not much difference.
ACM Trader, there is no dilemma. Making money is good. Period. And so good that with lots of it, you can consider giving some to beneficial causes. Bottom line: you need to avoid completely unnecessary mindf**ks if you are going to amass serious money.
Nice to encounter someone here with a moral pulse. As a generalization... People who specialize in profiting from human disasters, fraudulent stocks, or illegal trading... are sociopaths. Nobody forces you to rush to short airline stocks after plane crashes... After you shorted that cancer research pharmaceutical... While busy pumping and dumping that gold mining scam... Leaving you some time to figure out what stock the next hurricane is gonna hurt... Before you cash in on that inside information you dug up. On the other hand... Risk arbitrage in distressed or bankrupt companies is fine... And even necesssary to provide liquidity and fair pricing in these stocks... And an integral part of the capitalist system. (As a result... that widow might get $1.00 instead of $0.50 for her Son of Enron stock). Precisely how you make a living... says EVERYTHING about you. From the sound in his post... I doubt that ACM Trader is doing anything more than creating efficient markets.