Are Short Trades Better Than Long Trades?

When it comes to price action trading, long trades vs. short trades is too simplified a discussion. It’s really about what your reliable trading systems are telling you. If you have more than one system telling you “go short” or “go long,” then that’s probably the best information you have. If anyone is telling you “short trades are better X amount of time,” that could be 100% correct historical information. That has no bearing on future results.

Regarding historical information, many trading systems have been in a self-destruct mode ever since COVID-19 caused turbulence. We saw, and still see, more volatility than average. We saw huge volatility months ago – fluctuations and halting that was unprecedented. Though the virus is still raging in parts of the world, mainstream information implies European countries mostly have new cases under control. At present, the same cannot be said about the U.S. Have you looked at big companies and industries in states that are projected to be hit longer-term by the virus? What about job loss and stability of these companies? Is it a time to go short? If Florida continues to be hit hard through fall and winter, what about those tourism dollars? Are traders going to short Carnival or Tropicana? You may be tempted to say short trades are better, but once recovery occurs (yes, be positive!), long trades may tempt you.

Part of being a successful intraday futures trader is being mindful and not getting carried away by news events and tempting patterns. Stay as objective as possible. If there’s negative news, there’s not always a negative reaction. And if negative news is coming out, you can bet the big players and analysts are already aware and ready to manipulate the markets in their favor.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.