my journal 2

You're not the first one to disagree with me on this one, and what you mention about the Dow is a good point. However, the general understanding, also implied by the expression "buy & hold" (why doesn't anyone talk about "sell & hold"?), is that stocks go up more than down, and since I am totally positive that stocks (in the long run) go up more than down (I see it whichever way I look), I will not do any research on this subject. Since you disagree, please produce the evidence to the contrary. You should have that evidence, if you disagree.

Of course I am taking for granted that you and those disagreeing with me won't tell me things such as "oh, but look at this stock: it fell for 10 straight years" or "look at the period from 2000 to 2003 and how all the stocks fell"... obviously I am talking in general and in the long term. Even if you were to believe that stocks go up and down equally, inflation alone would make them go up more than down.

Travis. Your reply is interesting indeed. You have a belief and when asked what is behind that, you tell me I should prove you wrong. I am not sure why I should do that when all I asked was why you thought stocks went up. I can only presume you have no answer.

I actually agree that a long only strategy is OK - but for different reasons.

The average IPO lasts 8 years before the company goes under. Whilst I would agree that many IPOs go up, the average one ends up worth zero. Most are worth less than their IPO price after 12 months. 'Going public' is a huge interest free lump of cash that many companies abuse. For instance in the way of huge CEO payoffs.

I would certainly agree that the indices generally go up but I am not convinced this is because the same companies are going up in value or that the survivors are. There is obviously a difference.

Thanks for the valuable information in your posts. Your explanation makes a lot of sense.

You know what Travis - I really have a hard time going short. I am not sure why this is but I just can't seem to do as well as I can on the long side. That's on both swing/long term trading and very short term trading.

I don't think there's anything wrong with that at all. I think downswings are a bit more vicious (people need to sell, people don't need to buy). I tend to pass them by as there are plenty of other opportunities around.

You are not ignorant by any means. We take certain things for granted based on what we are fed by the mass media. There are many things I have been fed this way that I haven't ever questioned. The 'stocks rise' story is something that I did take to task. The jury is still out.

I don't have a problem with going short on the currencies, because I know they go up and down equally. Other than this, only going LONG has many advantages, besides that the indexes and their stocks go up more than down. For example, if you are short on stocks there's all those problems with overnight margin. At any rate, I trade futures, so all my (ignorant) talking about stocks is only because I am trading them on the chart game.

Didn't use the stoploss on a couple of trades, and paid that mistake dearly.

Getting good... or rather: getting used to having an edge.

This time I even played a couple of short trades.

Trades allowed: all directions, but doing mostly LONG.
All trades according to support/resistance (both bounces and breakouts).

Getting through the problem of accepting a loss: I kept on trading even after I got a loss. Maximum loss allowed: 10% (I close the position as soon as the loss exceeds that).



I played till I doubled, regardless of number of stocks played. I will do so in the future as well: doubling up and then quitting the game for a while.