Why is it not as easy as what I am suggesting?

elliot.baker.eb

Junior member
21 1
Hello all

I read an article the other day which got me thinking about the indices, sp500 and dowj. When you look at the all-time chart you can clearly see the two big booms around 2000 and 2007 that were followed by recessions / drops in price.

You can also clearly see that we are at a higher price now than ever before, to me this suggests that at some point in the future the price will eventually drop, if in a similar way to before then this will be a decline over a period of a year or two, before it turns up again.

So I'd like to know what is stopping anyone from waiting until you can see a clear downward trend over a period of weeks-months in either of these indices and then putting a down spread bet or going short or however it works with Indices and making a fortune as it continues its path down in value?

Why is it not this straight forward, if it isn't?
 

Attachments

  • sp500 all time.jpg
    sp500 all time.jpg
    70.4 KB · Views: 158

Stargunner

Active member
127 19
Making a call like this on the market, particularly like you suggested (buying an already falling market, aka trend trading) isn't hard.

The hard bit is:
Determining your timeframe for this move
Working out the best possible risk/reward scenario to trade it on
Knowing when you may be wrong, and cutting losses
Knowing how long you can be right for, and taking profits at the appropriate time
Keeping sane whilst all this happens

You share my 'view' though. I'm a big fan of Dow theory and think we're at distribution now, so I'm waiting for that fall so I can prepare my short.
 
G

Guest36985

0 0
Hello all

I read an article the other day which got me thinking about the indices, sp500 and dowj. When you look at the all-time chart you can clearly see the two big booms around 2000 and 2007 that were followed by recessions / drops in price.

You can also clearly see that we are at a higher price now than ever before, to me this suggests that at some point in the future the price will eventually drop, if in a similar way to before then this will be a decline over a period of a year or two, before it turns up again.

So I'd like to know what is stopping anyone from waiting until you can see a clear downward trend over a period of weeks-months in either of these indices and then putting a down spread bet or going short or however it works with Indices and making a fortune as it continues its path down in value?

Why is it not this straight forward, if it isn't?

Made any money with this strategy yet?
 
  • Like
Reactions: Shadowman540

ACstudio

Active member
138 14
"Past performance is not indicative of future results." How often have you seen that?

Even if you look back at the daily candles on those downturns you will find days or even weeks where it looked like it might turn around. No body knows where the bottom is on that kind of movement. I'm sure there were a lot of people going short at and through the turn around thinking it still had some downside. I'm sure halfway through the move there were a lot of people going long because they thought THAT was the bottom.
People that did go short at the top were probably taking profits waaay before the bottom.....and those that managed to pick the bottom and go long at the turn around have probably been short for the last year or so at least.
 

elliot.baker.eb

Junior member
21 1
Hey up, I haven't done anything yet because I am living off dwindling savings at the moment! I really want to go short GoPro at some point.
 
G

Guest36985

0 0
Hey up, I haven't done anything yet because I am living off dwindling savings at the moment! I really want to go short GoPro at some point.

Its a nice idea, they're not the best and certainly not the cheapest, but they have a fan base so its a bit like apple in that respect, and you dont want to be shorting apple. :(
 

NVP

Legendary member
37,760 2,100
Hello all

I read an article the other day which got me thinking about the indices, sp500 and dowj. When you look at the all-time chart you can clearly see the two big booms around 2000 and 2007 that were followed by recessions / drops in price.

You can also clearly see that we are at a higher price now than ever before, to me this suggests that at some point in the future the price will eventually drop, if in a similar way to before then this will be a decline over a period of a year or two, before it turns up again.

So I'd like to know what is stopping anyone from waiting until you can see a clear downward trend over a period of weeks-months in either of these indices and then putting a down spread bet or going short or however it works with Indices and making a fortune as it continues its path down in value?

Why is it not this straight forward, if it isn't?

go for it and find out ...........:smart:
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock