Bias Towards One Direction

[sachuc]

I tend to biased towards shorting I find a excuse to short however I try against it and how much I lose except in very strong uptrend where I do go long mostly I lose where the trend is not strong in any direction and suddenly trend goes up
some times I go long and lose How to deal with this?

 

[shadowninja]

Why the short bias?

 

[tomorton]

Let the chart of whatever you are trading show you its trend before you decide what to do. For your investment/trading timescale work out how long a trend needs to be established before you would open a position. If you are trading equities, do not ignore the wider market - it would be hard to succeed shorting the one US stock from the Dow that is in a downtrend if the Dow itself is going up strongly. Work out the signs of trend that best show the direction for your markets: backtest over charts of previous periods to make sure you are right.

Remember, it should be Ready, Aim, Fire, not Ready, Fire, Aim.

 

[sachuc]

Short bias bcoz i have mostly only gained in ln short positions in index futures so I have to consciously be very delibrate force myself to be long when trend stronly up but in temp falls i play for fall continuation and it reverses and I lose
Ready, Aim, Fire, not Ready, Fire, Aim quote was good perfect for the context

 

[miracletech]

First of all the way the market has been the past few months, there are some rational reasons to have a short bias when trading the index futures. A long bias would certainly be more harmful.

However one way to deal with the bias would be to make sure that you have very specifically defined setups, that you commit to yourself that you will follow. When you are trading then just concentrate on the setups. If the setup says enter long, you enter long. If the setup says enter short, you enter short. Period.

Good trading,
Miracletech

 

[tomorton]

Hi Miracletech - Well put. I have such a range of set-ups, using just 9 set-up patterns, 3 of which are only intra-day, and all can be either long or short. However, yesterday and today I over-rode the signal from my best pattern becasue I could not believe the FTSE100 would go any higher. And it did. You put it well, I have to commit to myself that I will follow the set-up.

 

[tripleogstar]

Hi Miracletech - Well put. I have such a range of set-ups, using just 9 set-up patterns, 3 of which are only intra-day, and all can be either long or short. However, yesterday and today I over-rode the signal from my best pattern becasue I could not believe the FTSE100 would go any higher. And it did. You put it well, I have to commit to myself that I will follow the set-up.

So what are your patterns, and what is the success rate

 

[tomorton]

I can list my patterns as below, but knowing what they are will not necessarily enable you to profit from them. You might trade in different markets to me, where some of these patterns will either not appear or not work. For example, a pattern that features a morning opening gap wil not appear or at least not have the same significance in a 24 hour market as in the case of the FTSE100, where the underlying market closes at 4:30pm for the night. For full understanding of most of these I would recommend Raschke & Connors or Rivalland: I have boosted the tally to 11 -

80-20 Daytrade
Whiplash
Shuttle 14 (my designation, simply fading pullback away from 14MA)
Key Reversal
3-Day Unfilled Gap Reversal
Rivalland 3-day pullback swing
ID/NR4
60-min Opening Range Reversal
Opening Gap Fade
4/9MA Crossover (Golden / Dead Cross)
Company Results Trades – Follow reaction established at close of results day for 48 hours.

All strategies that work have a simple basis but become complex in practice. Study, learn and practice to succeed.
Best wishes.

 

[barjon]

Short bias bcoz i have mostly only gained in ln short positions in index futures so I have to consciously be very delibrate force myself to be long when trend stronly up but in temp falls i play for fall continuation and it reverses and I lose
Ready, Aim, Fire, not Ready, Fire, Aim quote was good perfect for the context

sachuc,

Why try to fight it? If you feel more comfortable on the short side then ignore the long side and just concentrate on your short set-ups and trade those.

good trading

jon

 

[miracletech]

Hi Tomorton,

Wow, 9 setups! I personally trade exactly 2 setups. A a short term trader, I would find it impossible to keep handle 9 setups. My reason for using only 2 is that I want to know each setup and it's nuances so well that I could trade it in my sleep. To me 9 is just too many to know that well. Interesting how what works for one trader is totally unworkable for another.

 

[tomorton]

The early morning reversal signal can be taken every day but it only works with market in high volatility so I sometimes must ignore it. From the others I might get 1 or 2 more per day but often none. Rivalland swing signals cannot generate more often than every 3 days or more. ID/NR4 is not a frequent signal. Trades depending on opening gaps come about once a week. Apart from the results trades (and I haven't done any of these for a longish time) I only trade one market, the FTSE100 index. The last 2-3 months I could have just traded morning reversals as the market has been so volatile and swings prone to reverse after just a day or two.

 

[miracletech]

Hi Tomorton,

Now I understand how you are able to successfully use 9 setups, since they each trigger so infrequently. Like I said I only use 2 setups, but together they generate around 6 trades on an average day.

Good Trading to all,
Miracletech

 

[jmpower]

Take it back to your set ups, your short bias is based in the mistaken belief that you know what the market is going to do next. Your set ups give you an edge, a better than 50/50 probability that the market will go in the direction its indicating. Even with that knowledge, you just dont know which way it will go, hence clear your mind of your market expectations, accept that it can go south when your indicators say north and vice versa. Its essential to think that way, because it will help your mind remove any filters you have about the information your seeing. Have you ever failed to see a buy signal when you were short? Did you find yourself actively hunting for more sell signals after you were short and missing a flat out in your face buy signal - like a big picture one or something? Thats your own psychology sabotaging your trading.

 

[kevintian]

If you are a short term trader who hold positions only for a few days to a week or two, I believe you would be better to ride on trend than think it's "too high".

Think probabilities, how many tops can you pick? Only one. Why pee against the wind?