We sold dow 30 cfds at 17590.2, based on the algorithm that views price history alone. Current market price is 17553.2. Should we take profit or wait for Armageddon? Statistical theory says take profit, yet, as Don describes it, there will probably be an inelegant dismount instead.
As it happens the trade went 100 points in the money but whipped around and I broke even.
As it happens the trade went 100 points in the money but whipped around and I broke even.
The algorithm tells me when to enter, not exit. Exiting can be a mechanical process, fixed time, fixed distance, or a combination of these with multiple contracts. It is impossible to lose in the long term with a good entry algorithm. I might even suggest the 24 week exercise was heading to that conclusion. The problem with exiting by algorithm is that most or all of the profit can be foregone, because it is designed to follow rather than anticipate a turning point. .
Thank you Maurice.
True but I have just made a testable prediction. The current apple trade is firing.
Before the end of january. This prediction however has no relevance to my investment activities, so no skin in the game, and I would much prefer to be wrong for the sake of funds I have indirect interest in.
Which global stock markets? All of them I guess. A falling tide lowers all boats. I rather regret making a dire prediction here as I could easily be wrong and reverse my idea without warning. This is the nature of technical trading, reversals can be made in a heart beat. Last night I was short and got caught in the huge rally, then covered about even just as the market was crashing. A 350 point dow swing. The nature of this volatility is discouraging for near term performance going into xmas.
On the technical picture I observe, there are no immediate precedents in the last few decades for this long term sideways action to be shrugged off and the bull market to resume. What is true is that the Americans lead the free world and must be accorded respect. An unregulated labour market seems to separate American growth prospects from Europe and Australia. Therefore while I am confident a market pullback for a year or so is happening, I would still back your country to recover first.
