Now it is time to start creating a short position

Discussion in 'Trading' started by chaykapwr, Mar 26, 2012.

  1. The upside potential is no longer outweighing the downside risk. There are 3 key zones to watch out for. However, I will start shorting at the first zone and then add IF we continue up. However, we shall at minimum get a nice size correction off the first zone.

    There is a probability I am wrong, however, its a small probability.

    The zones in the ES are




    for Nasdaq we have a HUGE resistance zone and this is the one that is offering the biggest reward (several hundred points)


    HOWEVER the heart of the zone is 3220-3300

  2. The upside potential is unlimited.

  3. Thank you for this post :)

    A friend of a friend said the same thing in 2007 when he got approved for a $350,000 house on a $35,000 a year income. The upside to housing is UNLIMITED!

    Just the kind of attitude that makes me more confident of this trade
  4. bone

    bone ET Sponsor

    How do you come to that conclusion ? Based upon previous market levels ? If that is the case, did your conclusion take into consideration the yields available from other equity markets and the fixed income sector during those previous historical timeframes - in other words, a legitimate relative value comparison ?

    My point being, why time the market - why not let the deep pockets go ahead and turn the market, and when the fresh downtrend has developed, then go ahead and get shortie. Personally, I just don't believe in fighting the market. It really is self-induced stress created from an ego fulfillement need that is just not necessary in order to make a very good living at this. My two cents.
  5. I find it quite funny that you speak of small probability of losing yet you can't even find the proper entry or even proper management.

    Starting a plan by adding to a losing position does not exactly speak volumes of your conviction and/or market read.

    What if your first zone is correct ?

    Then you win on small size.

    What if you are wrong?

    Then you lose on full size.

    Incorrect mentality to call tops in uptrends and incorrect money management as well.

    I'm with Bone, let it turn, then you can use proper sizing and proper stops and you won't have to be playing the top calling game which is frankly, absurd.

  6. The uptrend is still very powerful. I would be very fearful trying to fight this right here.
  7. It's the typical rookie mistake, it's the main reason why so many fail in this business.

    The necessity to short an uptrend or buy a downtrend to satisfy their psychological deficiencies.

    Eliminate overbought or oversold from your trading vocabulary because there is no such thing, it's a false perception.

    There is a strong trend in place, enjoy it, exploit it, embrace it, don't fight it or else quit trading.
  8. Of course Im not going to give out everything about my management style ;)

    but since you caught on, what I will be doing is treating each zone like a seperate trade. Short full on each zone, with a stop in between
  9. bone

    bone ET Sponsor

    1. You are hardly the first to scale entries - even using stops.

    2. If you are so confident, why not address the probability issue for once ?
  10. Lucrum


    Help me out guys I've lost track. What is this anyway, top call number 72,423?

    Of course when one of these guys does finally get one...uh..."right" he'll be pounding his chest like Tarzan.
    #10     Mar 26, 2012