Thread: LONG vs SHORT Trades (1 System or 2)

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  1. #1

    Default LONG vs SHORT Trades (1 System or 2)

    Hello All,

    I wasn't too sure where to post this thread but hopefully its in the right location.

    I've been developing a mechanical system and to date have only focused on the LONG Trades but have now started looking at developing the Short side of the system.

    However, what is beginning to become very clear is the fact that one can't simply "invert" (for a better word) the Buy Signals to produce adequate Sell conditions.

    When I backtest the "short" side only, the results are extremely disappointing. I do however, have other ideas which I believe will offer a better performance once backtested for trading the Short side.

    However, my question is this:

    As the "Short" signal conditions will be totally different to those for generating the "Long" Signals, should I still try to develop the ONE system with both Long & Short signals or should I simply just design another system to trade the Short side only??

    What advantages / disadvantages are there will both approaches? I can think of a few but would welcome comments from others......

    Many Thanks in advance,
  2. #2


    I had a similar issue a few years back and what I found was, (as a rule of thumb) that markets go down 3 times faster than they go up with the exception of forex.
  3. #3


    Good Point !!!

    My "BUY" conditions are based purely on Price / Volume relationships but what is interesting to note so far, is that these specific relationships are not so reliable when looking to go Short, which has really surprised me.

    One thing this has taught me is the importance of backtesting ones ideas...
  4. #4


    do you have a set-up with associated conditions?

    if so, is it the set-up that's failing or the conditions that are causing failure? you should be able to test that.

    i find a difference in the significance of my associated conditions long side to short side.

  5. #5


    Could you elaborate on what you mean by both "set-up" and "conditions" as I would have thought they were part of the same thing.

    Sorry for the probably stupid question

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