Bull market strategies

It's a quite common response when people mention their returns etc. that "it's a bull market", I presume that it is intended to discredit the actual return numbers. Seasoned veterans, or those who present themselves to be at least, may say something along the lines of "let's see you in a bear market" etc.

I see the point that, in a bull market, most strategies that involve buying stocks will make money, as stocks go up. I do think that people who espose "its a bull market" are full of it since you can still look at your return vs the market on a risk adjusted basis to see if you outperformed, but I post to those people:

If its a bear market, and I post good returns because I'm going short, does that mean those returns have no credibility?

If anyone can make big returns in a bull market, why can't anyone make good returns in a bear market?

If its that easy to identify that its a bull market and you can make money by buying stocks, why aren't you rich?


Nothing personal here as no-ones ever said it to me - but I do wonder when I see people post "its a bull market".

Re: Bull Market & Strategies

Stox.
I get it all the time,with T/Trader.

Its a Long----Long term trading methodology if it cant turn a profit in a screaming Bull market then it would be pretty hopeless.

The majority trade long---taking advantage of a bull market (which if you have a look at the All ords over the last 100 yrs) which is 80% of the time,success should be easily achieved.

You'd be suprised how many actually still cant turn a profit.
Particularly out performing the market.

If its a bear market, and I post good returns because I'm going short, does that mean those returns have no credibility?

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Haha Stox---they will want you to TRADE LONG in a bear market then turn Profit better than the market.

Re: Bull Market & Strategies

You are both missing the point. In this market, throw a dart at the board, buy what it lands on, wait and it goes up. Any long strategy works in a bull.... well nearly.

People who've learnt to trade in the bull, have their mistakes glossed over by the bull. The bear doesn't do that. It exposes mistakes unforgivingly.

Tech, you've been around long enough to see traders who've done well in a bull drop like flies in a bear. It happens every cycle... and this is an historic bull.

Those who've prepared for the bear will in all likelihood continue to prosper.

The point is, many will be exposed when this does eventually turn. How many gave back Tech boom profits? LOLOL Many! When this turns it will be the same all over again.

I stress that those who are trading properly will survive and prosper.

Re: Bull Market & Strategies

wayneL said:

Those who've prepared for the bear will in all likelihood continue to prosper.......I stress that those who are trading properly will survive and prosper.

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This is the part many, myself included wonder about. To me bullmarket strategies (discretionary speaking) are no different to bear market ones, the only difference should be the quantity of short signals versus long signals. The trade management should be the same.

If you were a mechanical trader you would prepare for this by having a system that could generate short signals....yes?

Interesting to see some comments from those who have traded through these markets.

Cheers,

Re: Bull Market & Strategies

wayneL said:

You are both missing the point. In this market, throw a dart at the board, buy what it lands on, wait and it goes up. Any long strategy works in a bull.... well nearly.

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In the 5 yrs T/T has been operating the All Ords has risen around 120%
There would be few who have gained 120% over that time against those funds they have allocated to trading.
T/T has returned around 1300% on investment.There will come a time when T/T is killed off due to market conditions being outside those in which it was designed---Its numbers will take it out---At that point I estimate a return of approx 900% on investment.
Sure I hear many saying but you probably will give back 400% of your initial investment. True I probably will BUT I could have sold out in the first 2 yrs for 300%. Its about TIMEFRAME.

People who've learnt to trade in the bull, have their mistakes glossed over by the bull. The bear doesn't do that. It exposes mistakes unforgivingly.

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Yes I agree. However those who will be hit most are in my veiw those who attempt to turn $5000 into $50,000---in 2 weeks.
And most definately those who have no NUMBERS. You can get numbers simply from a trades record.

Tech, you've been around long enough to see traders who've done well in a bull drop like flies in a bear. It happens every cycle... and this is an historic bull.

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Yep see it in BOTH bull and Bear markets.

Those who've prepared for the bear will in all likelihood continue to prosper.

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I'd go as far as saying those who are aware of their trading performance will likely prosper.Those who arent and trade willy nilly are at greatest risk---that $5000 will be zero in no time.

The point is, many will be exposed when this does eventually turn. How many gave back Tech boom profits? LOLOL Many! When this turns it will be the same all over again.

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I'll be one of them who gives back some (a great deal) in the effort to create a return well above normal. Its a price I'm prepared to pay---and in defence of those who have taken the punt See MTN thread-- so to have and will they. Again its Timeframe.----maybe some luck.

I stress that those who are trading properly will survive and prosper.

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Properly---each percieves this differently.
The method used in trading to me has little bearing on "Proper trading".
How its applied does.

Re: Bull Market & Strategies

wayneL said:

People who've learnt to trade in the bull, have their mistakes glossed over by the bull. The bear doesn't do that. It exposes mistakes unforgivingly.

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You are 100% correct.

I was telling this exact same point to my friend the other day.
Me and him both have only started trading in this bullmarket.

The number of stupid mistakes I was making even only last year, if it wasnt for the bullishness of the markets, i wouldve paid for them dearly.

So im very grateful to the market for giving me the chance to learn the lesson without suffering too much pain.

Re: Bull Market & Strategies

CanOz said:

This is the part many, myself included wonder about. To me bullmarket strategies (discretionary speaking) are no different to bear market ones, the only difference should be the quantity of short signals versus long signals. The trade management should be the same.

If you were a mechanical trader you would prepare for this by having a system that could generate short signals....yes?

Interesting to see some comments from those who have traded through these markets.

Cheers,

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Providing the mechanical system actually works short, yes. Long term trend following doesn't work very well on the short side. Because of the mathematics and market behaviour.

I personally think you need to go more on swings and minor trends than major trend systems like techtrader.

The stock market is rigged (both naturally and through manipulation) to the upside. People are naturally prone to buy when they perceive the stock as cheap. Bubblevision is there every day with its cheer leading and propaganda and of course there is always the good old PPT. Then there is Super, 401k buying etc.

The mathematics of trend trading have been discussed before. But the problem with shorts is that you can only get to zero, you can only make 100% nominally, whereas with longs you can score multibagger... and it is this that makes trend trading work.

The other problem is with backtesting. As most of the time, the market is in a bull phase, backtest results on short systems will suck. So you never really know what your numbers are.

Swing trading is a whole 'nuther bowl of wax. Swing trading short or long is great, so long as you have the market phase right. I generally like to have short positions to balance the longs. In the last few months this has been a waste of effort. I've hardly opened a short at all; there is a drought of set-ups and buyers have been coming in at every level.

Take the last few "corrections". These have been ridiculously anemic and buyer have been all over them like a rash.

But I love making money from shorts. It makes me feel like a smart@rse when everyone else is bitching about the market. But it's swingers for me.

Re: Bull Market & Strategies

I've been trading / investing (whatever it is I do) since 1998. haven't really had to deal with a sustained bear market. Lost capital in the tech wreck and taken a few individual stock hits etc etc. I really don't know how I would go in a bear that lasted (say) 6 months +.

Is there anyone out there that was around even in the years immeditatley following 87 ... that period of trading before the 87 high was taken out. I think around 92 - 93. If so would you share how you adapted the 1982 - 87 skills to the 1987 - 93 (sideways) market?

There's the acute timeframe ie October 87 and the chronic situation 87 - 93 to consider ...