Quote from: exstasie on Today at 08:36:21 PM

Quote from: fillippone on Today at 02:38:09 PM

Quote from: exstasie on August 05, 2020, 10:47:40 PM

That's quite easy to say now, in hindsight, after the Fed pumped $3 trillion in QE (75% of its balance sheet) inside ~3 months, with another $3 trillion in stimulus spending by Congress over the same period. These levels of market intervention were completely unprecedented. We're talking 10x the size of TARP and beyond. It's downright silly to make comparisons to previous generations of QE and say it was rational to buy the knife in March (or not to sell) on that basis.

It's funny, I was one of the only people around here predicting a V-bottom in stocks back in March-April. Now everyone is trying to act like it was so obvious.....

I don't want to be too technical, but of course when oil traded negative or equity dividend were battered of course it was very easy to pickup a good trade.

I disagree. Most people I know got slaughtered with puts or hedge shorts, thinking April/May was just a temporary bounce. I am talking about seasoned traders here. Hardly what I would call "easy" trading.

You can only say it was easy with the benefit of hindsight, now that you've seen a total reversal since March. At the time, it was anything but. Catching the knife based on conventional wisdom would have been sensible after a 10% decline. .......But then the SPX ended up crashing 36%. That's what being rational gets you: bagholding. And like I said, nobody could have predicted the Fed and Congress were going to inject money an order of magnitude bigger than 2009. It's only in hindsight that we can see the liquidity situation for what it truly is.

One another factor that can turn a good idea in a bloodbath is the stop loss. A too tight stop loss can hinder the execution of a trade closing it too soon, if the timing is not perfect, something that is very likely to happen in a volatile market.