At all time high there is always the greed that the market will shoot up further and we will miss out on the upmove. At the same time there is a fear that if we are stuck up holding long positions and market takes a complete U turn, we will suffer losses. But we are short term traders and we should trade the markets at all time high with the same tactics as usual.
When the markets are at all time high, we have to trade from long side as they are likely to continue to go up higher. But for us if we are daytrading Nifty for example, our stops are normally at 12-15 points away so if the market reverses, that is the maximum we will loose. Similarly in swing trades, our stops are say 30 points away, so we risk those 30 points but if the market continues higher, we stand to gain 100,200 ,300 or even 500 points...so we have to take these trades as Reward to risk is very favourable .
But NEVER keep holding a loosing position as the market if reverses, may never come to its original level, as it happened in 2007 and 2008....but in downtrend, we will make more money by shorting the markets....so we as traders are happy bothways.
Smart_trade
When the markets are at all time high, we have to trade from long side as they are likely to continue to go up higher. But for us if we are daytrading Nifty for example, our stops are normally at 12-15 points away so if the market reverses, that is the maximum we will loose. Similarly in swing trades, our stops are say 30 points away, so we risk those 30 points but if the market continues higher, we stand to gain 100,200 ,300 or even 500 points...so we have to take these trades as Reward to risk is very favourable .
But NEVER keep holding a loosing position as the market if reverses, may never come to its original level, as it happened in 2007 and 2008....but in downtrend, we will make more money by shorting the markets....so we as traders are happy bothways.
Smart_trade
