%% And that's just why the trend is your friend/ for many; a good trend lasts much longer than the end of the trend...……………………………………………………………………………………………………………………………………….And the bend of the trend tends to last longer/ than the end OF THE TREND.
%% Excellent points Julia C made . Another way of saying that is '' the smarter you are, the longer it takes/LOL. There is plenty of logic/emotion in the stock market/ enough logic to make a profit + sometimes avoid stupid stuff. Many people lose money buying airline stock; but Carl Ichan made a bunch buying part of an airline/stock.
Sell in May and Go Away in the Equity Index Futures Markets https://quantpedia.com/sell-in-may-and-go-away-in-the-equity-index-futures-markets/ Sell in May and Go Away in the Equity Index Futures Markets 25.February 2016 Abstract: The period May 1 to the turn of the month of November (last five trading days October) has historically produced negligible returns. The rest of the year (late October to the end of April) has essentially all the year's gains. In this paper we show that there is a statistically significant difference and conclude that the strategy go to cash in the weak period and go long in the strong period has about double the returns of buy and hold for large cap S&P500 index and triple for the small cap Russell2000 index during the period 1993-2015 in the index futures markets. Notable quotations from the academic research paper: "September and October have historically had low stock market returns with many serious declines or crashes occurring in October. Also the months of November to February have historically had higher than average returns. This suggests the strategy to avoid the bad months and be in cash then and only be long the stock market in the good months. Sell-in-May-and-go-away, which is sometimes called the Halloween E ffect, is one such strategy that is often discussed in the financial press. Figure 1: S&P500 Futures Sell in May (SIM) and B&H Cumulative Returns Comparison. 1993-2015. (Entry at Close on 6th Day before End of October. Exit 1st Day of May.) Figure 2: Russell2000 Futures Sell in May (SIM) and B&H Cumulative Returns Comparison. 1993-2015. (Entry at Close on 6th Day before End of October. Exit 1st Day of May.) For the S&P500 a buy and hold strategy turns $1 on February 4, 1993 into $3.05 on December 16, 2015; whereas, sell in May and move into cash, counting interest (Fed funds effective monthly rate for sell in May) and dividends for the buy and hold, had a final wealth of $5.77, some 89.2% higher. For the Russell2000, the final wealths were $2.70 and $7.11, respectively, some 163.3% higher. Figures 1 and 2 show this strategy using the rule sell on the first trading day in May and buy on the 6th trading day before the end of October, for the S&P500 and Russell2000 index futures for the years 1993-2015, respectively. This rule did indeed beat a buy and hold strategy by two and three times in final wealth with lower standard deviation risk. The strategy works in most but not all years and in strategy design can be combined with other e ffects depending upon market conditions." A new related paper has been added to: #31 – Market Seasonality Effect in World Equity Indexes Authors: Dzahabarov, Ziemba Title: Sell in May and Go Away in the Equity Index Futures Markets Link: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2721068
"Not to trade is also to trade." "It is better to cut your fingers rather than cutting your legs." "Arabs never go to sky." And finally our economics professor always told us the best signal for a trend reversal is when the neighborhood baker begins trading.
"The way to build long-term returns is through preservation of capital and home runs. You can be far more aggressive when you're making good profits. Many managers, once they're up 30 or 40 percent, will book their year [i.e., trade very cautiously for the remainder of the year so as not to jeopardize the very good return that has already been realized]. The way to attain superior long-term returns is to grind it out until you're up 30 or 40 percent, and then if you have the convictions, go for a 100 percent year. If you can put together a few near-100 percent years and avoid down years, then you can achieve really outstanding long-term returns." Stanley Druckenmiller
%% NOT my favorite quote, but funny; ''it takes courage to be a pig'' =Stanley Druckenmiller [I did enjoy the kids book named '' Pigs Can Fly'' LOL
Something along the lines that the handwork is done in the preparation, the actually executing of the trade should be effortless and boring. If its exciting, you are gambling... Another one that I like is to trade bigger and more aggressively when you are on a winning streak and scale down smaller and smaller if you have a losing streak, even if it means to the point of scaling down to the bare minimum trade. This protects your capital when you are (Probably making a lot of mistakes you aren't realizing in a not so friendly market) and also helps you make the bank in a case when the market goes wild with euphoria.