Never leave money on the table.

Discussion in 'Index Futures' started by mikeriley, May 16, 2022.

  1. mikeriley

    mikeriley

    I pulled the first paragraph from Investopedia's
    article titled "20 Rules Followed by Professional Traders".

    Long-term profitability requires two related skill sets. The first is to identify a set of strategies that make more money than they lose and then to use the strategies as part of a trading plan. Second, the strategies must perform well while the market experiences both bull and bear impulses. In other words, while many traders know how to make money in specific markets, like a strong uptrend, they fail in the long run because their strategies don't adapt to inevitable changes in market conditions.

    Imagine playing a Poker game where the Dealer
    removes half the cards from the Deck.
    A football game without a running game,
    where the Quarterback only throws the ball
    every play. How about a basketball game
    where no player ever takes a 3 point shot.
    Sounds like a winning strategy?

    I trade fulltime and would never only
    trade one direction. It makes absolutely
    no sense to me, not to mention I'd
    be leaving 2/3 of my profits on the table.

    The Youtube weekend warriors are not aware
    the winning minority in the markets ALWAYS
    trade both directions. I've read hundreds of
    trading books, and all of them achieved
    and MAINTAINED success by understanding and practicing this basic concept.


     
    smallfil likes this.
  2. I generally trade one direction per day. It works fine.
     
    persistence and murray t turtle like this.
  3. deaddog

    deaddog

    I trade long only. It's what I do. It's what I know and what I make money doing. When I don't have a market that will give me a long trade, I sit on the sidelines.
    My objective is to make money, not to keep busy.

    I'm envious of those who trade both ways.
     
  4. speedo

    speedo

    Long, short -same thing. If you are having a problem, invert your charts and see the setups upside down. If a market is directional...participate.
     
  5. This is true for currencies, but not (exactly) for equity indexes. They behave ever-so-slightly differently going the other way.
     
  6. For example, inverse SPY over the last little while

    upload_2022-5-16_22-20-8.png

    VS a real bull market

    upload_2022-5-16_22-20-51.png

    Notice in particular how little time the inverted SPY chart spends at the highs.... As I said, ever-so-slightly.
     
  7. Jzwu2017

    Jzwu2017

    You can always long the inverse ETFs (e.g., SQQQ) and UVXY on a down trend day if you prefer to long only.

    There’s really no difference between long and short. It’s the mindset.
     
    sukhen, mikeriley and murray t turtle like this.
  8. deaddog

    deaddog

    If you are trading individual stocks that's not true.
    A short can gap up more than double the price you sold. A long can only go to zero.
     
  9. Jzwu2017

    Jzwu2017

    Likewise, a long can gap down too. Admittedly, shorting inherently bears more risk so you have to be very careful.
     
  10. deaddog

    deaddog

    Therein lies the challenge. How do you be careful with something you have no control over?
     
    #10     May 16, 2022