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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: sandintoes who wrote (7944)	4/18/2005 11:19:14 PM
From: Walkingshadow	Read Replies (1) \| Respond to of 8752

Yes, volatilities tend to move inversely to price. It is not a perfect relationship, but a general one. T

To: sandintoes who wrote (7944)	4/18/2005 11:31:34 PM
From: Walkingshadow	Read Replies (1) \| Respond to of 8752

Now you can see why long positions in a downtrending market are unwise----the volatilities are working against you. The rallies are muted in magnitude, while the downturns can be very pronounced. In a downtrending market, short positions are the only way to consistently make money, aside from the occasional stocks that do not move with the market indexes. Short positions tend to have far better risk/reward in a downtrending market, because the volatilities are on your side. T