Personally, I try not to pick bottoms. Averaging losers is a
great way to lose money. My tactic would be to let the price do the
talking and once it has painted a tradeable bottom, go all in there
and then with a stop just below the low.
Yes, you miss the absolute bottom, but you get the meat of the
move at a much lower risk level.
'Losers average losers' is an old saying but it's very true in
my experience.
I never trade on what I think the market's going to do, only on
what it just did.
Posted by canadianguy on 19th of Feb 2009 at 04:43 pm
so Unsane, in the case of UYG here, looking back please tell me
which indicators you used to look back and buy. There have been a
few huge up moves in it, the best one in November 21. How would you
have known to buy that and not just watch it fake you out like it
had so many times prior?
3, and 2.7, thinking...it CANT GO LOWER, and it has only gone
lower...Im also long UYM at 12, rode it upto 17 and didnt sell, now
Im underwater. Sold FCX at 30.3 and rebought today...The good
news, we have until May at this rate of selling until we are
at ZERO! TWO MONTHS. My favorite long stock is QCOM and son
of a gun, i shorted it today, because it looks weak. Why dont
you call Barny Frank yourselves and pimp him...He is in his Newton
office this week, its listed, but he will ask you where you live
and you have to tell him some town in MASS to be able to talk to
him.
I have my mech systems. But basically I look for either an X%
move off a low (typically 4-8% for a 2x ETF) or a clear breach of
long term resistance.
I don't believe that any indicators or TA predict the future. At
all. Therefore there is no way to distinguish a breakout from
a fakeout ahead of time. Therefore you are inevitably going
to be faked out, probably more times than you catch a breakout.
Therefore the key is to (a) trade all the not-obviously-dumb
breakouts and (b) manage your risk very tightly with position sizes
and stops.
Why I'm against averaging losers is that it's a strategy that
depends on buying a stock in a downtrend. This means that you are
committing to losing money up front, and continuing to lose money
so long as the stock goes down. Either that, or at some point you
cry 'uncle' and eat the loss.
It's also very psychologically traumatic!
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Personally, I try not to
uyg
Posted by unsane on 19th of Feb 2009 at 04:38 pm
Personally, I try not to pick bottoms. Averaging losers is a great way to lose money. My tactic would be to let the price do the talking and once it has painted a tradeable bottom, go all in there and then with a stop just below the low.
Yes, you miss the absolute bottom, but you get the meat of the move at a much lower risk level.
'Losers average losers' is an old saying but it's very true in my experience.
I never trade on what I think the market's going to do, only on what it just did.
so Unsane, in the case
Posted by canadianguy on 19th of Feb 2009 at 04:43 pm
so Unsane, in the case of UYG here, looking back please tell me which indicators you used to look back and buy. There have been a few huge up moves in it, the best one in November 21. How would you have known to buy that and not just watch it fake you out like it had so many times prior?
thanks
Ive been long UYG since 4 and
Posted by delane on 19th of Feb 2009 at 05:28 pm
3, and 2.7, thinking...it CANT GO LOWER, and it has only gone lower...Im also long UYM at 12, rode it upto 17 and didnt sell, now Im underwater. Sold FCX at 30.3 and rebought today...The good news, we have until May at this rate of selling until we are at ZERO! TWO MONTHS. My favorite long stock is QCOM and son of a gun, i shorted it today, because it looks weak. Why dont you call Barny Frank yourselves and pimp him...He is in his Newton office this week, its listed, but he will ask you where you live and you have to tell him some town in MASS to be able to talk to him.
I have my mech systems.
Posted by unsane on 19th of Feb 2009 at 04:55 pm
I have my mech systems. But basically I look for either an X% move off a low (typically 4-8% for a 2x ETF) or a clear breach of long term resistance.
I don't believe that any indicators or TA predict the future. At all. Therefore there is no way to distinguish a breakout from a fakeout ahead of time. Therefore you are inevitably going to be faked out, probably more times than you catch a breakout. Therefore the key is to (a) trade all the not-obviously-dumb breakouts and (b) manage your risk very tightly with position sizes and stops.
Why I'm against averaging losers is that it's a strategy that depends on buying a stock in a downtrend. This means that you are committing to losing money up front, and continuing to lose money so long as the stock goes down. Either that, or at some point you cry 'uncle' and eat the loss.
It's also very psychologically traumatic!