January 2012
Intermediate to advanced
576 pages
16h 41m
English
CHAPTER 15
Always In
This might be the single most important concept in trading. Traders should constantly assess whether the market is trending, and an “always-in” approach can help a trader to make that important determination. If you had to be in the market at all times, either long or short, the always-in position is whatever your current position is. Some variation of this is used by many traders, including institutions. For example, most mutual funds are usually always-in long, and most hedge funds remain close to fully invested, but often have always-in long positions in some markets while simultaneously having always-in short positions in others. Individual traders should consider using an always-in approach if they tend to miss too many big moves.
Determining the always-in direction is different from asking whether the trend is up or down, because most trend traders don't hold a position when the market is unclear. The market, at all times, is either always-in long or always-in short, and there is usually a general consensus about the direction of the trend. Traders who take 20 or more trades a day see the always-in position flipping repeatedly throughout the day, but very few traders could reverse this often, day after day. However, traders who are just looking for the best three to 10 swings a day, and are willing to allow multiple pullbacks without changing their opinion about the direction of the current swing, have an always-in mentality. They can either reverse ...
