Discussion in 'Trading' started by qdz3se, May 11, 2004.
What's your plann when a correction is over?
There's nothing on the daily SPX chart to suggest the correction is over. We just took out a major pivot low yesterday.
Take a look at the SMH chart since last Thursday.
It's time to pickup bargains, very safe to buy, very good luck.
it's time to sell big time
Wed 5/12/04 might be an important low. I'm long, but cautiously so, and looking for markets to test previous upper range Apr highs.
In all my years of trading, I have always hated the bit where I try and pick a top or a bottom. And I've done it a thousands of times. The problem is, when you get it right (and when you have tried as many times as I have, you have to get it right some times ) you get such a rush. Generally when it is a t/b, the movement away is so swift and frequently violent that as soon as you are properly on side you can really run it. So the question is this. Over time, does it financially make up for itself. The answer, of course, is no.
I still do it occassionally, like visiting an old friend, but when I do it's always in small size ( like 5 - 10 % of my line size ) and I am almost challenging the market to prove me wrong, so I can at least feel clever for only putting on a small position and thus taking a very minor loss.
What' the point of all this? Well, simple. The easiest way to make money is never at the top or the bottom, its just going with the trend, picking a good spot to go with it. So why bother trying to get that reversal spot ? Why bother trying to be so accurate. If the general market is moving one way, yes of course it has to retrace, but who are we to get in at exactly the spot where the market says enough?
Now of course this will work for some traders, as we each must have our own style. But for anyone not that experienced, I would say this is not to way to begin your education, picking tops or bottoms.
Just as a pointer, I was looking through my trading records for when I was trading the bund. Having traded roughly a million contracts a year for nearly five years, I think it is fair to say that I learnt this from experience.
But like I siad, I still bloody do it!!!! Livermore was right - some times our worst enemy is often ourselves, so be careful.
And if it bounces and you don't have position on, you can always blame me!!!
Good trading gents
I think part of the appeal to picking the bottom is that you can usually place these reversal trades with a fairly tight stop , and when you are right you will hopefully be able to hold for a large swing , since you are a strong long and won't be in a hole at the 1st pullback.
Your post does make a lot of sense because usually there is always a higher probability trade entry by waiting.
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