On Longs, Shorts and Capturing the Trend
Posted: Mon Nov 21, 2005 2:05 pm
the problem i am trying to solve, or maybe just state for starters, is how to capture the end of an uptrend or the beginning of a downtrend. ever noticed how many charts look like A in the exhibit below (please excuse the art) and none like the B ?
a prolonged uptrend starts slowly and is captured well with something like MACD, a downtrend ends slowly often forming a smooth bottom. again MACD works well. perhaps the end of an up trend or the start of a down trend could be captured with a breakout indicator. Maybe this difference in behavior accounts for the bad performance of the shorts vs. longs - it is not easy to capture the beginning of a down trend.
does anyone have any thoughts about this?
goldfish.
a prolonged uptrend starts slowly and is captured well with something like MACD, a downtrend ends slowly often forming a smooth bottom. again MACD works well. perhaps the end of an up trend or the start of a down trend could be captured with a breakout indicator. Maybe this difference in behavior accounts for the bad performance of the shorts vs. longs - it is not easy to capture the beginning of a down trend.
does anyone have any thoughts about this?
goldfish.
