There is an old Wall Street saying that "hope is not a valid investing strategy." Traders are supposed to be acting on cold, hard facts and when they resort to hope and prayers, then maybe that is an indication that a trade won't work.
Of course, we will always have our hopes and prayers. No matter how well planned our trades may be, we are still at the mercy of the market gods. They will determine our fate and be quick to punish us if we think we can outsmart their whims.
Many market players, especially those who buy and hold for the long term, hope for the market to just go straight up day after day. Their hopes and dreams have been rewarded very nicely since the election, but for many traders this is terrible action. What short-term players thrive on is volatility. So many are so hungry for some movement that they have become automatic buyers of any and all dips. That is the only real thing that active traders can do other than chase stocks straight up.
In straight-up markets, it is the buy-and-hold crowd that has the advantage. Their money is hard at work and they sit back and watch it grow. It is when the market is ugly that active traders gain their advantage. Avoiding the downside is how active managers produce their best relative performance. They may not be able to keep pace with fully invested investors in a hot market, but they will trounce them when downside does develop.
I'm hoping and praying for some downside to create a new crop of opportunities. Each day the market goes straight up, the fewer new setups exist. I can barely find a new thing to buy right now because of how lopsided the action has become.
I have a few names on my radar such as Advanced Micro (AMD) , Constellium NV (CSTM) and Star Bulk Carriers (SBLK) , but it sure isn't easy to be an aggressive buyer.
