yesterday James commented on that DVDS trade saying that it was
meeting exit conditions last night, at the moment it no longer is.
That said, I may elect to add some sort of stop using yesterday
prices or I might elect to take off the trade early depending on
what the market does.
as far as this particular system, as I stated I will be
experimenting with some other exit conditions to see if I can
improve that.
also guys the short illustrates my point: for years and
years everyone bugs me, why don't the systems do more shorts? Why
do they take so many more longs than shorts, even in bear
markets?
As I've said - shorts are a real bugaboo. When I did my
extensive testing I found that it was easy to get into situations
where a system would get caught short during a strong rally. MUCH
easier for that to happen than for a long trade to get caught in a
bad decline. Short systems were much more difficult than the long
systems and I had to keep the settings tighter and as a result
there were much less short trades.
Even in bear markets the long systems do way way more trades
than the short systems do
markets do not move up and down in the same way, the psychology
is different, it's not like a Yin and Yan situation where one
behaves opposite to the other: Markets tend to flush down
quickly, get oversold, then bounce as fear ramps up. Rallies on the
other hand can be strong initially (rip your face off rallies) then
price can drift up for long periods of time - it's why topping is
more of a process that needs to develop over time, whereas
bottoming tends to be quick and sharp.
markets trade differently on fear than they do on greed
I don't know the exact statistic but over the longer time
frames, I know markets go up like 75% vs down maybe 25%. (just an
observation) The downs happen fast and can be exciting and
rewarding but much more difficult to time, from my experience.
There are more players on the upside when it comes to large
trades like in 401Ks which don't usually give one an option to
short.
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DVDS system update and some other comments
Posted by matt on 3rd of Feb 2023 at 09:28 am
yesterday James commented on that DVDS trade saying that it was meeting exit conditions last night, at the moment it no longer is. That said, I may elect to add some sort of stop using yesterday prices or I might elect to take off the trade early depending on what the market does.
as far as this particular system, as I stated I will be experimenting with some other exit conditions to see if I can improve that.
also guys the short illustrates my point: for years and years everyone bugs me, why don't the systems do more shorts? Why do they take so many more longs than shorts, even in bear markets?
As I've said - shorts are a real bugaboo. When I did my extensive testing I found that it was easy to get into situations where a system would get caught short during a strong rally. MUCH easier for that to happen than for a long trade to get caught in a bad decline. Short systems were much more difficult than the long systems and I had to keep the settings tighter and as a result there were much less short trades. Even in bear markets the long systems do way way more trades than the short systems do
markets do not move up and down in the same way, the psychology is different, it's not like a Yin and Yan situation where one behaves opposite to the other: Markets tend to flush down quickly, get oversold, then bounce as fear ramps up. Rallies on the other hand can be strong initially (rip your face off rallies) then price can drift up for long periods of time - it's why topping is more of a process that needs to develop over time, whereas bottoming tends to be quick and sharp.
markets trade differently on fear than they do on greed
Thanks for the thoughts Matt,
Posted by cozz101 on 3rd of Feb 2023 at 09:37 am
Thanks for the thoughts Matt, well said!
I don't know the exact statistic but over the longer time frames, I know markets go up like 75% vs down maybe 25%. (just an observation) The downs happen fast and can be exciting and rewarding but much more difficult to time, from my experience. There are more players on the upside when it comes to large trades like in 401Ks which don't usually give one an option to short.