Comments on: The Difference Between Going Long and Going Short

By: Leavitt Brothers: Blog « Crazyhorse26's Blog

Leavitt Brothers: Blog « Crazyhorse26's Blog — Sun, 22 Nov 2009 05:00:13 +0000

[...] 22, 2009 by crazyhorse26 Leavitt Brothers: Blog. Going Long and going [...]

By: RichE

RichE — Mon, 09 Nov 2009 16:40:08 +0000

Jason, you’re unbalanced! Have you considered hypno-therapy? LOL Seriously , read your article and highlight your entries in red and exits in green, you’re not balanced, you need to spend more time on your exit strategy(s). Is this exhaustion, a test of or correction to the trend? At this point its math, as you said the LONG entry is fairly mechanical. Try selling a CALL, calculate your cost basis and target return; e.g. buy at 45 and is now trading at 50 showing signs of overbought. Sell the 55 strike for 5. Your return if assigned at 55 would be 33% not 11% if sold at 50. Your cost basis would be 40 not 45 allowing a larger stop, 10% vs 5%. Personally I focus on timing the selling of the CALL, it’s significantly increased my bottom line.

By: ron dunn

ron dunn — Mon, 09 Nov 2009 15:11:12 +0000

I am a long term holder and usually stay too long with a stock or mutual fund. I would like to be able to hold a short position on the market at the same time, like an insurance policy. Make sense? I find by holding long, most of my positions work out fine, not without alot of volatility. I’m not sure how to also have a short position, like SDS or QID.

By: Urizen

Urizen — Mon, 09 Nov 2009 06:23:18 +0000

I too agree that long and short require a different strategy and in a way I approach your thoughts, as the long side is more mechanical. Even in an uptrend I don’t care at all about the fundamentals.
However for a short I put the emphasis on the fundamentals, without ignoring the TA cause I need them for timing (and therefore I often turn the chart upside down (with the $ONE function in Stockcharts).

An upward market moves more slowly than it does on the downside. You perceive it differently because of your trading style. I think your trading style influences you in such a way that you see it different and not because it is different.

thanks for sharing your thoughts

By: whidbey

whidbey — Sun, 08 Nov 2009 20:17:39 +0000

Over the long-haul shorting requires a down trend (which is difficult to see early in a reversal, and personal tolerance of corrections in the down trend. “Tolerance” is an emotional value that most traders have to nurture. Most traders will tell you markets are biased to the upside over the long run. We do not trust shorts because we do not believe they represent the “long run trend” in markets. That is very human since we dislike the idea of a market that goes to zero, rather than just down for a time.

I like to use LEAPS when going short for a rational reason. That means a fundamental reason that I consider highly probable to occur (seasonality is a favorite). And I have a fair record with LEAPS just because I have to leave them in place to see the result, to learn the outcome. Sometimes learning is costly, but I still believe it is rational behavior.

By: mahab

mahab — Sun, 08 Nov 2009 19:53:14 +0000

I agree with the author that shorts and logs are not opposite. Market forces generally in favor of long (which represents the healthy economy/+ve mind market participants.. etc). on the other hand shorts tend represent spontaneous reaction to certain conditions or fear of loss etc. Many people/funds/institutions are go only in long side. So breakout trade of long is much better than breakout trade on short.