Posts Tagged ‘Trend’

Hi all,

For a while I was trying to fight the trend. This is a mistake. Although sometimes swimming against the flow can be profitable most of the time it is just difficult.

That’s why when the market direction is up, there is no point to go short. But… it is not a secret that since March bottom the market was going in one direction with very few corrections. Many people will say that a big correction is due to come and September is a bad month anyway!

They may be right and we may see a change of direction but until that happen, I would not recommend to open a short position. But you can do what I’ve done: Bought some shares that I believe their trend is up but back-up it with a put option for October. You can still find them cheap so for 40-50 points you can have a back-up if something will change.

I myself bought FTSE 4500 put for October a bit expensive at 86 points, but still I am happy with this insurance.