My Long Position

I am long and will cut my long positions and go short on the Nifty futures if it falls below 4696. A word on my long position. I have been asked several times questions like what is your target? Why are you bullish and the answer is simple. I am long but that is because the trend was up until yesterday (as per my definition of trend) I am not necessarily bullish nor do I expect anything about the market today. I only know that I am positioned in the direction of the market trend of the recent past. I know, nor predict or expect anything for the future. That is the same reason I do not have a target. I do not know whether the market will move up today or not. Similarly I do not know nor expect the market to only move up to a certain level. The future is unknowable. The market is perfectly capable of moving much more than one expects or much lesser than one expects. So I do not have any targets for the move. I only wait for the market to turn around and for my definition of the trend to change and move down for me to cut my long position and go short.

This method of positioning oneself has two clear disadvantages. One is that I will never ever catch the top or bottom of any move. The second disadvantage is that I will go wrong regularly and keep taking small losses. The one advantage this method of trading has is that I will hopefully never be sitting out or have the opposite position when the market makes a large move in any particular direction. This one advantage has to make up for the other two disadvantages for me to have a profitable year!

In trading there is no one right way to trade. But this is the right way for me because I can live with the consequences of trading in this manner without undue stress. Therefore I remain long despite knowing that 4800-4850 could offer strong resistance to the market. I remain long despite the macro worries in the world economy. I remain long despite my fears...not because I do not have any.