Info!! Trading Success Lies On The Other Side Of Fear

*  Since 2012, nosotros tin laissez passer on the axe carve upwards marketplace seat days into quartiles, based upon the break of stocks inwards the SPX that are making fresh five-day highs vs. five-day lows.  When nosotros are inwards the weakest quartile--most stocks making novel lows relative to novel highs--the adjacent five-day furnish has been +.76%.  On all other occasions, the average adjacent five-day furnish has been +.17%.

*  Since belatedly 2006, when I get-go began collecting these data, when the put/call ratio across all listed stocks was inwards its highest quartile, the adjacent 5 days inwards SPX convey averaged a hit of .43%.  On all other occasions, the average adjacent five-day furnish has been +.04%.

*  Since belatedly 2006, when the break of SPX stocks making fresh five-day highs vs. lows has been inwards its weakest quartile, the adjacent five-day furnish has averaged +.45%.  Across all other occasions, the average adjacent five-day furnish has been +.05%.

*  Since belatedly 2006, when VIX has been inwards its highest quartile, the adjacent 5 days inwards SPX convey averaged a hit of +.22%.  Across all other occasions, the average five-day hit has been +.11%.

*  Since belatedly 2006, when the percent of SPX stocks trading higher upwards their 5-day moving averages has been inwards its weakest quartile, the adjacent 5 days inwards SPX convey averaged a hit of +.46%.  Across all other occasions, the average five-day hit has been +.03%.

*  Since belatedly 2006, when the percent of SPX stocks trading higher upwards their 20-day moving averages has been inwards its weakest quartile, the adjacent 5 days inwards SPX convey averaged a hit of +.34%.  Across all other occasions, the average five-day hit has been +.07%.

One trader sees the marketplace seat motion higher for a few days together with puts inwards an lodge to buy, fearful of missing a big marketplace seat move.

One trader sees the marketplace seat motion lower for a few days together with enters an lodge to sell, fearful of missing the overdue crash.

One trader sees the marketplace seat motion lower for a few days, fears a debilitating drawdown, together with stops out of a long position.

All 3 traders lose coin over time.  Entry together with larn out execution predicated on fright convey negative expected return.

Indeed, the results of acting on fright are so pitiable that they're promising.

Trading success lies on the other side of fear.

Further Reading:  Making Fear Your Friend
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