Trading Against Myself :Part Two

I am bearish on the long term prospects of the economy and the stock market. Despite my feelings about the long term, I went net long a few days ago and have caught a very nice trade. A few years ago I would not have been able to do that. The possibility that I would be correct in my long term view and lose money at the same time would have been more than I could handle.

It took me nine years of trading until I was able to trade against my long term view. Since then my results have improved dramatically. I am not sure if this has been the only factor but I am confident it has been one of them.


PJ said...

Tsachy, I'm quite similar, but I still avoid trading against my long-term view. I just sit out when the market is moving against me, or I expect a countertrend move. This week I am up about 0.5% with no long positions, just alternating between short and cash.

My timing lately has been good enough that if I'd gone long instead of neutral I'd have made a lot of money, but like your earlier self I just would hate to lose money by betting against my long term view. Also, if the market suddenly switched toward my long term view, then I'd have no confidence in my losing position and would get shaken out. Too easy to start topping and tailing.

I am considering trying some of those anti-long-term positions with close in stops, so that I get taken out for a small loss if I haven't caught the zeitgeist right. But that very short-term style is a little foreign to my cast of mind.

Tsachy Mishal said...

What makes me feel better about doing it is that I am finding some individual stocks that are cheap, mostly in healthcare. Those are the names I have been buying.