Short Trade Signals vs Long Trade Signals

[Chorlton]

Hello All,

Can I ask whether anyone has had a reasonable success in developing an effective & robust strategy which can be used to trade on the short-side of the UK Mrkts?

Over recent months I have been focusing on developing a mechanical strategy to trade on the Long Side but at the same time have been mindful of the benefit of developing a Short side strategy as well, especially given the recent conditions experienced in the Mrkt.

While being able to generate numerous numbers of ideas for trading on the Long Side which have then been reduced to comply with my own Strategy parameters which I have set, I have found it increasing frustrating in identifying any ideas for trading the Short-side which have sufficient merit to develop further.

The biggest observation I have made so far is how different the behaviour of the Mrkt is when trading on the different sides.

Consequently, I'd be interested in views from others who have undergone this process and the conclusions that they may have reached.


Thanks in advance,

Chorlton

 

[Hotch]

Well, I admit my system is a bit "out there", but if you have your long signals, all you need to do is eliminate stagnant signals and you are left with your short signals. Works for me, but like i said, it's a bit different, so it might not work.

 

[trader3cnd]

I found out that it is better to avoid short side. Moves are too fast and reversal are even much faster. I try to make money in longer term using long only startegies. I quit shorting stocks after I did that with MER and it went $5 against me in a few minutes after I placed the order.

 

[Chorlton]

Well, I admit my system is a bit "out there", but if you have your long signals, all you need to do is eliminate stagnant signals and you are left with your short signals. Works for me, but like i said, it's a bit different, so it might not work.

Can I ask what you mean by "stagnant" signals? Not too sure I follow you....

Thanks in advance,

Chorlton

 

[Chorlton]

I found out that it is better to avoid short side. Moves are too fast and reversal are even much faster. I try to make money in longer term using long only startegies. I quit shorting stocks after I did that with MER and it went $5 against me in a few minutes after I placed the order.

I agree that the Mrkt Dynamics are totally different when trying to trade the Short-Side. Faster moves with less early indication definately makes it a difficult side to trade.

However, having the ability to trade this side has IMO two main advantages. Firstly, one is capable of being in the Mrkt longer and taking advantage of both trend directions.

Secondly, if one prefers to only trade Long, then the Short strategy can still be used as one of your stop conditions when taking Long Trades.

Consequently, I still believe there is merit in trying to develop something although I agree that it is probably a difficult proposition.

Chorlton

 

[Chorlton]

I found out that it is better to avoid short side. Moves are too fast and reversal are even much faster. I try to make money in longer term using long only startegies. I quit shorting stocks after I did that with MER and it went $5 against me in a few minutes after I placed the order.

I agree that the Mrkt Dynamics are totally different when trying to trade the Short-Side. Faster moves with less early indication definately makes it a difficult side to trade.

However, having the ability to trade this side has IMO two main advantages. Firstly, one is capable of being in the Mrkt longer and taking advantage of both trend directions.

Secondly, if one prefers to only trade Long, then the Short strategy can still be used as one of your stop conditions when taking Long Trades.

Consequently, I still believe there is merit in trying to develop something although I agree that it is probably a difficult proposition.

Chorlton

 

[Hotch]

Can I ask what you mean by "stagnant" signals? Not too sure I follow you....

Thanks in advance,

Chorlton

Sorry, was a bit sleepy at the time.

What i was trying to suggest as a basic start was that if you have decided what a long signal is (prior to an upwards movement in price), and you want to find your short signal (prior to a downwards movement in price), all you need to do is find out "stagnant" signals (prior to sideways movement in price), and everything that isn't a long or stagnant signal should be a short signal.

Basicly, instead of looking for short signals, looking to exclude everything else might be easier.

Hopefully that makes more sense. As before, this works for my system, but might not for others.

 

[Chorlton]

Sorry, was a bit sleepy at the time.

What i was trying to suggest as a basic start was that if you have decided what a long signal is (prior to an upwards movement in price), and you want to find your short signal (prior to a downwards movement in price), all you need to do is find out "stagnant" signals (prior to sideways movement in price), and everything that isn't a long or stagnant signal should be a short signal.

Basicly, instead of looking for short signals, looking to exclude everything else might be easier.

Hopefully that makes more sense. As before, this works for my system, but might not for others.

Hi Hotch,

Ah... that makes more sense now

Not sure if this approach would be suitable in my case but I will definately give it a bit of thought... cheers for the suggestion......

 

[Hotch]

Hi Hotch,

Ah... that makes more sense now

Not sure if this approach would be suitable in my case but I will definately give it a bit of thought... cheers for the suggestion......

Happy to help.

 

[trader3cnd]

Secondly, if one prefers to only trade Long, then the Short strategy can still be used as one of your stop conditions when taking Long Trades.
Chorlton

This is a very good point