bbordic wrote:
As I clearly stated, yes shorting at the LOY was not good. My point was that there was a long strong trend down right out of the gate, which for me was much easier trading then it was after the consolidation/chop and drift higher. Most of the trades I see posted are fairly small profit targets so I was curious as why no shorts on the way down. That’s all I meant.
Again, it is critically important to identify a gap and go early. If you are proficient at it – fine. Most traders are not. What looked easy today was due to the fact that that pattern was correctly identified. Most of the time shorts will pile in early and you will have violent short squeezes that fly back in your face and leave you with nasty losses. That pattern of stacked candles has to be PERFECT! Realize that when you short after a 40 pt S&P 500 drop on the open, much if not all of the move could have been made. That limits the downside and because of the drop your risk exposure is great because the market/stock could fill the gap. As Hari pointed out, all ships drop with the tide. It is much harder to identify relative weakness because the fakes and the “real McCoy’s” are falling. It is always much easier to look back at what happened than it is to trade in the moment. I hope this perspective helps.
