Posted by mcheberger on 2nd of May 2011 at 06:16 pm
Matt, you show published statistics on the SPY that shows it's
more profitable to enter Longs at the close of the same day and
exit them on the open of the next day.
Why wouldn't the same principle apply to entering Shorts on
the open of the next day instead of the close of the same day?
must be what berkmere is saying. Most of the short trades
will be during downtrends, so if the market is making big overnight
moves, those will tend to be to the downside.
Will be interesting to hear Matt's answer....maybe because most
of the short entries are during a bounce in a downtrend, thus the
risk is of more downside the next day rather than exiting a long
during an uptrend (which I believe the long entry tries to
do).....??
Good question. I'm sure Matt has backtested every possibility
out there. I see your point, but the thing to remember is that the
majority of short trades is going to take place on overbought
bounces during a declining market. In declining markets, it's very
common to have gap downs the next morning. If you wait until the
next morning to enter shorts, you could be entering trades on a big
gapdown (bad entry).
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Entries/Exits
Posted by mcheberger on 2nd of May 2011 at 06:16 pm
Matt, you show published statistics on the SPY that shows it's more profitable to enter Longs at the close of the same day and exit them on the open of the next day.
Why wouldn't the same principle apply to entering Shorts on the open of the next day instead of the close of the same day?
entries/exits
Posted by Michael on 2nd of May 2011 at 08:31 pm
must be what berkmere is saying. Most of the short trades will be during downtrends, so if the market is making big overnight moves, those will tend to be to the downside.
Great point...
Posted by burkmere on 2nd of May 2011 at 06:24 pm
Will be interesting to hear Matt's answer....maybe because most of the short entries are during a bounce in a downtrend, thus the risk is of more downside the next day rather than exiting a long during an uptrend (which I believe the long entry tries to do).....??
Good question. I'm sure Matt
Posted by cw12 on 2nd of May 2011 at 07:21 pm
Good question. I'm sure Matt has backtested every possibility out there. I see your point, but the thing to remember is that the majority of short trades is going to take place on overbought bounces during a declining market. In declining markets, it's very common to have gap downs the next morning. If you wait until the next morning to enter shorts, you could be entering trades on a big gapdown (bad entry).