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Strategies & Market Trends : DAYTRADING Fundamentals
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To: Dave O. who wrote (8012)4/26/2000 4:05:00 PM
From: TraderAlan  Read Replies (2) of 18137
 
Dave,

<a market correction would seem to only wipe out those who won't cut losses quickly>

That would "only" be most new traders.

I've never thought that you can flip the market upside down and just keep the same strategies going the other way. That's too much of a simplification. Selling short is very difficult in a down market. There are constant squeezes and fakeouts. Folks are much better off shorting mildly up to flat market environments. And most new traders will get wiped out faster trying to apply downside momentum techniques to corrections than buying upside breakouts.

Unless they're really done their homework (and few do), they are better off standing aside on big down days and buying the short rallies in between defensively.

Alan
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