Profiting from a fall in the Aussie Market

[skyQuake]

The most u can make from a short sale is 100%. Realistically, you can make 60 or 70% from a great short, whereas a good long can turn into a multibagger (eg 500%)

Thus, I would think the bulk of the gains from any trend following system would come from longs rather than shorts

 

[CanOz]

The most u can make from a short sale is 100%. Realistically, you can make 60 or 70% from a great short, whereas a good long can turn into a multibagger (eg 500%)

Thus, I would think the bulk of the gains from any trend following system would come from longs rather than shorts

Well said Skyquake

 

[pavilion103]

Much would depend on the timeframe and if you are trading or investing.

If you can identify good short trades you can often make quicker gains.

I prefer long but see the value in trading the short side too.

 

[fiftyeight]

Cheers

Agrees with what I was thinking

Fiftyeight

 

[skc]

The most u can make from a short sale is 100%. Realistically, you can make 60 or 70% from a great short, whereas a good long can turn into a multibagger (eg 500%)

Thus, I would think the bulk of the gains from any trend following system would come from longs rather than shorts

Another thing that fundamentally favours longs over shorts...

If a company is growing profits and dividends, the share price cannot stay low forever as investors will jump to those dividend cashflows.

But a company may make losses for a long time, yet it is possible for it to have a sustained high share price for whatever reason.

 

[fiftyeight]

I was also thinking along those lines as well SKC.

Also, if your time frame is large enough markets tend to rise. I am thinking that implies some kind of statistical advantage although small, over being long rather than short on a smaller time frame.

Fiftyeight

 

[Trembling Hand]

Also, if your time frame is large enough markets tend to rise. I am thinking that implies some kind of statistical advantage although small, over being long rather than short on a smaller time frame.

No thats wrong. Markets, indexes, rise because they are designed to pick winners. They dump the crap ones every quarter.

The number of stocks that last are quite small.

 

[fiftyeight]

No thats wrong. Markets, indexes, rise because they are designed to pick winners. They dump the crap ones every quarter.

I was talking about 2 separate points. So yeah that what I was thinking

Fiftyeight

 

[pavilion103]

As I originally planned to do. I have placed a short on a bank.

So that I obey the rules of the forum, I won't post details until after the trade is taken.

 

[minwa]

Puts are great as usually IV goes in your favor, they also cannot be banned by exchanges.