Fighting the tape
En intressant text som nog många känner igen sig i, själv har jag fallit i den fällan många gånger. Den här specifika texten handlar om att många försöker gå emot den rådande trenden, vilket är att kämpa i motvind. Men det kan förstås finnas lägen där det kan vara fördelaktigt att agera just så (mean reversion).
"Tonight I wanted to explore a behavior that is as old as the markets...fighting the tape. There seems to be quite a bit of this going on lately, especially since the market broke through 875.
Now I'm talking about perma bears trying to pick a top but this behavior is not exclusive to bull markets & perma bears. Hardly! Fighting the tape is one of the reasons bear markets can do the terrible damage that they do. Perma bulls jump on every rally in a bear market looking for a bottom that never comes. Well it never comes until the last bull is broke.
Bull markets are the same. They continue to take money from the bears day after day and month after month until there are no bears left solvent. Once that happens the bull market is over.
So why do investors choose to fight the tape? Let's face it if we could simply control our urge to trade against the large trend we would have very few losing trades. Why? Because as long as one has a little patience every trade in the direction of the major trend is eventually going to get rescued when the main trend resumes.
It's such an easy concept but one that just seems almost impossible for many traders to follow.
My best guess is that traders have a bias that they aren't willing to let go of, often based on their view of the underlying fundamentals. They take a trade based on those fundamentals, real or imaginary, and then when it goes against them they start to rationalize why the market will soon come to its senses. Often they make the unforgivable mistake of adding to losing positions.
I can't even begin to tell you all the nonsense I've read over the last several months. All of it useless for anything other than convincing oneself to stay in a losing trade against the major trend.
Resten av texten finns att läsa här: Fighting the tape
Så förhåller det sig definitivt. Den dag man handlar på det man ser istället för det man hoppas eller tror ska ske, det är då man börjar tjäna pengar!
"They continue to take money from the bears day after day and month after month until there are no bears left solvent."
Det skulle betyda att uppgången definieras av dom som inte deltar i den?
Näe, däremot är det en naturlig följd att alla björnar blir fattigare för varje dag börsen är i en uppgångsfas.
Klart det finns några som ligger kort när marknaden vänder ner, så har det ju alltid varit.
Däremot så är det ju alltid dumt att gå emot trenden.
Bästa oddsen för att gissa när klockan är slagen är inte att gissa när det sker, utan att
vänta till klockan är slagen, då vet man ju plötsligt.
Kapri håller jag med däremot:-)
Jag tror det är nödvändigt att gå emot.
Evil Du baissade ju nyss, gick Du inte emot då?
Värme
spearofdestiny
Ja han skrev ju han brukar gå i den fällan
"My best guess is that traders have a bias that they aren't willing to let go of, often based on their view of the underlying fundamentals. They take a trade based on those fundamentals, real or imaginary, and then when it goes against them they start to rationalize why the market will soon come to its senses. Often they make the unforgivable mistake of adding to losing positions."
:-)
"Luck is when preparation meets opportunity" Seneca
läsvärt.
det är ju faktiskt så att det är först när man erkänner för sig själv att man är en idiot som man kan försöka göra någonting åt det. fast det är ju å andra sidan inte helt lätt om man är dum i huvet.
Inlägget är redigerat av författaren.
Lite fortsättning från samma person:
"I often see traders trying to pick a top. It's a favorite pastime of bears.
But I have to pose the question is it really worth the trouble? I think when I'm finished you will see that it not only isn't worth the effort but is actually one of the single worst strategies anyone can choose.
Picking tops is actually the bread and butter trade of Moe Ronn (our fictional character representing the average retail investor).
Let's say Moe thinks the market is due to top out and roll over into a bear market anytime based on his interpretation of the fundamentals (either real or imaginary it doesn't matter). So Moe decides he's done with the long side of the market and he begins shorting in an attempt to spot the top. He makes repeated attempts to short taking multiple small losses while he waits for the expected turn.
Now let's say Moe finally gets lucky and shorts XYZ stock at the exact top at $100. Let's also assume that Moe manages to hold on through the extremely violent whipsaws that almost always occur as a bull market slowly rolls over. (This is a huge assumption but just for the sake of argument we're going to give Moe this one).
Let's also assume that Moe manages to exit his short at the very bottom with XYZ trading at $20. Moe just earned himself a very nice 80% return minus however much he lost trying to pick the top.
That's how the Moe Ronn's of the world trade.
Now let's see how John I. Que goes about trading a bear market. Let's say John also thinks the market is due to roll over into a bear phase and he too wants to short XYZ. First off John doesn't attempt to try and spot the top. He knows that is a fools game. John just goes to cash and waits patiently for a sign that the bear has truly returned.
Eventually XYZ rolls over and sinks below the 200 DMA. By this time XYZ has lost $20 already. At this point John is confident we have now entered a bear market and he sells short XYZ. John also manages to exit his short close to the bottom at $20. John just lost one hell of an opportunity because he was late to the party, right?
Not quite, the opposite in fact. Consider that the drop from $100 to $20 was an 80% gain for Moe's short. Not bad, not bad at all. But the move from $80 to $20 was a 75% gain for John's short. John only gave up 5% by waiting till the bear clearly declared itself and in the process avoided the many false starts that Moe had to suffer through in trying to pick the top. In reality John most likely made more money by missing the top by $20 than Moe did by timing it perfectly.
Now one can try to pick tops if they want to and remain in the Moe Ronn camp or they can adopt the tactics of John I. Que and change their nickname to "Moe Money"."
#9 "John also manages to exit his short close to the bottom at $20."
Om John äntrar marknaden när 200DMA krossas så borde han väl lämna den när priset krossar igenom uppåt? Då blir vinsten mindre än 80-20$.
Genom att läsa texten kan jag inte förstå varför det skulle vara bättre att slaviskt försöka hitta toppar och bottnar än att slaviskt följa dma-200.
Vad händer om john's dma-200 hamnar i otakt med priset och han åker på förlust efter förlust?
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Ogilla! 9
Gilla!
Så sant, här tror jag många på AG känner igen sig inklusive mig själv..men jag har lärt mig the hard way också..