SFMc01
358 posts
msg #59620
- Ignore SFMc01 |
2/11/2008 2:47:31 PM
My daddy says: "Never bet against the market." And we all know that daddy is always right. But, like much of what daddy says … and like other prophets say …. while it sounds good, I’m not clear what it means exactly … or, how to implement it.
How do I know when I’m actually betting against the market? As a daytrader, does it mean that I am not to buy if the Dow is down today … so far? Or, if it has been down the last three days, but, it is up today … so far … is it OK to buy now? Or, should I just go along with what Investors Business daily says when their daily market news says “market in correction”?
I wonder how other traders handle this question. One day trading guy I know says that if QQQQ is down from what it was yesterday, don’t buy … only sell short. I don’t know whether he’s right or not. I do know he doesn’t appear to be rich.
I’d like to hear how others handle this situation … when do you stay out and when do you jump in? Please jump in now with your thoughts.
|
johnpaulca
12,036 posts
msg #59621
- Ignore johnpaulca |
2/11/2008 3:08:03 PM
SFMc01...I look for stocks breaking out from some consolidation phase before jumping in. Predicting market direction is a fools game. Look at my buys last friday DVN, MTL, WFR, they were all up while the market was down. (just my 2 cents)
|
nikoschopen
2,824 posts
msg #59623
- Ignore nikoschopen |
2/11/2008 3:17:45 PM
It doesn't matter whether ure a over-caffeinated daytrader, equal-blend swinger, or a mellowed out position trader to "bet against the market". Everyone does it. Some will come out alive and some will be buried alive. There are those who successfully sell the top and still manage to make money while there are those who successfully buy the breakout and equally make a ton of money. By the same token, there are those who successfully sell short the bottom and still manage to buy even lower while there are those who likewise profit successfully by buying the bottom.
As such, it ain't about going with or against the market that will fatten up ure wallet. Rather, it's all about risk vs. reward. That is, does the reward amply justify the risk taken and, if so, by how much? Personally, I would like to see the risk:reward ratio of 1-to-2.
So, next time ure about to make a trade, instead of asking whether the market is dirt cheap or too damn expensive ask whether the reward outweighs the risk.
|
maxreturn
745 posts
msg #59635
- Ignore maxreturn |
2/11/2008 10:19:41 PM
I swing trade stocks off the daily charts so I can't speak for the daytraders. All I can say from experience is I'd rather have the market at my back than in my face. While you can't predict the market, there are certainly ways to put the probabilities in your favor.
|
BEVIL1
14 posts
msg #59636
- Ignore BEVIL1 |
2/11/2008 11:21:58 PM
Maxreturn.
I agree its better to have the wind at your back for the trade, now the big question what other indicators do you look for? Teach me to fish. please.
bevil1
|