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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: bcrafty who wrote (129386)	2/10/2006 1:20:36 PM
From: Win-Lose-Draw	Respond to of 209892

I think we're all pretty much in agreement, with maybe just some terminology differences...? ...who DO you fade, and when do you do it? If I have to pin the smart money label on someone ("smart" in the literal sense) I would pin it on, say, Susquehana, John Henry and guys like Taleb. Susquehana makes its living selling options (ie, essentially shorting volatility and strong trends), Henry makes his living riding strong trends, and Taleb makes his living going long extreme volatility. Between them, they pretty much cover all styles of speculation, and they all make damn good money even though they run mutually exclusive strategies. Which is a roundabout way of saying I don't believe in a fadeable "who", because whatever "who" is doing to lose money, you can point to a "who else" following a similar strategy with great success. Shack is going to kill me for this, but I think it comes back to macro/FA. Right now the consensus (ie actual price action) says there is very little risk of a high-volatility event in the near future. Even though volatility is hovering around historical lows (Ok, maybe Shack won't kill me, that sounds enough like TA I can almost visualize the chart. -bg- ) I can (and do) fade that. When the bet will payoff big, I have no idea, but I'm a patient mofo. -g- Simlilarly, we just had truly historical low short-term rates. That was fadeable. We still have historically low long-term rates, which still are fadeable. In US equities, the reason I am taking every trending signal is because its been a heck of a long time since there's been a trend. By historical standards, we're over the median length of time markets stay stagnant, so (in my mind) its time to start fading the range. I really am that simple! The stagnation could last for another 18 months, but odds favor a quicker resolution, and I'd rather take my lumps now than chance missing what should be an incredible ride in one direction or the other. Does any of this make sense? I guess what I'm saying is I don't think of it as fading a "who", so much as fading a "what".