6/25/10 Who Knows Where The Time Goes/ The Waiting Game

Across the evening sky, all the birds are leaving
But how can they know it's time for them to go?
Before the winter fire, I will still be dreaming
I have no thought of time
For who knows where the time goes?
Who knows where the time goes?

I'm starting to believe that 'Waiting' trumps 'Shorting,' even during a downtrend.

(a) Shorting must be the trading equivalent of reckless driving. It's dangerous in a way unique to shorts- the panic associated with a short squeeze (at least IMO) is at least twice as intense as the panic associated with a sell-off. With leveraged shorts, the anxiety is intensified more than 2-3 fold- it's enough to drive a sane trader into watching every tick.

(b) It requires excessive vigilance. Sell-offs are typically sharp and fast. Then prices bounce- hard. This translates into short windows. If you're not alert and focused, you're likely to (i) miss the boat to begin with, or (ii) watch profits turn into losses in the blink of an eye.

(c) It's 'easier' to play the long side. Price movements are slower, and uptrends last longer. When you're long, the world smiles with you. When you're short, you're on your own. Watch your back.

It's not necessary to profit both ways. The goal is maximum profit with minimum risk/anxiety. One can do quite well simply buying weakness and selling strength.