The Average Investor's Blog

A software developer view on the markets

No more shorts!

Posted by The Average Investor on Jun 11, 2010

At least not based on my current strategies.

Lately I have been doing some re-testing and it looks like that moving averages are especially successful when used on the long side. That holds even when the time series tested has not performed so exceptionally as S&P 500 over the last 60 years. That’s right, trading based on moving averages from the long side, would have been successful both in Nikkei and Nasdaq 100. Both currently well below their respective all time highs.

On Monday, I was still debating what to do. My gut feeling was telling me that the market is heading South. So is the 10-month moving average. At the same time, the odds are against making decent profits from the short side. I had to make my choice, emotions vs dry data. I picked the latter. Monday morning I closed all short positions I was holding and now I am looking to re-enter the market.

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