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Old 10-20-2007, 12:21 PM   #1

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Why people fall in love with shorting

We had a thread while back about why traders love to short, but I could not find it quick in the search so here's a new thread.

The discussion was why do some traders some to fall in love with shorting. Why does it seem like you read about shorting, esp on a daytrading perspective, more than going long.

Well, here's why:

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Old 10-20-2007, 12:25 PM   #2

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Re: Why people fall in love with shorting

We know as traders that when the markets fall, they can fall hard.

What's the catch? A day like this is not common at all and anyone that thinks they should prepare for the giant short day will get hammered in just about every other market condition.

Don't get me wrong, we want to catch this move when it happens, but just do not fall in love with shorting b/c one day had a massive move. If you can constantly predict this move, more power to you. Most others will not be able to do this with regularity, so it's important to not get caught up in one day of big action down.

And even though these days are not common, you have to at least be aware of a possible strong trend day if you do not trade the trend well. A day like Fri could wipe out many accounts if you were just waiting for that bounce to happen.
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Old 10-20-2007, 01:55 PM   #3

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Re: Why people fall in love with shorting

Same reason people fall in love with any strategy, it reflects their personality. Those who "pathologically" take the downside have always interested me. I am an uberbull by nature and it takes discipline reinforced by much pain to be unbiased to the upside. I find the real bears to be a group who are pretty negative in general about everything.
The best traders never fall in love with anything but the side that wins in the moment and then they reevaluate and reassess and take the next play that makes sense.
Maybe the answer to your question is that they haven't figured out that emotion is to be eliminated to the maximum extent possible.
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Old 10-20-2007, 04:27 PM   #4

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Re: Why people fall in love with shorting

That's a good question. As Stan Kroll said "they slide faster than they glide".....
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Old 10-20-2007, 05:16 PM   #5

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Re: Why people fall in love with shorting

1) Traders trade with the flow of the market, not with their opinions. They shouldn't fall in love with either long or short. From this perspective, it is not important which way the market is heading to. Go with the market flow of the least resistance at the current moment. That's it.

2) Traders trade with volatility. The higher the volatility, the more opportunities the market are offering. Usually, down-moving markets are more volatile than up-moving markets. From this perspective, down-moving markets are preferred to up-moving markets.
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