shorting, eToro copy trading
Discussion
Blown2CV said:
Given AI and tech markets are debatably going to tank... anyone have any experience of copy trading investors on eToro who use shorting strategies? Any tips there or otherwise to try and capitalise on what i believe will be a massive drop?
cheers
If you think there is a massive drop coming, just open a brokerage account, fund it, get approved for futures trading, and go short on something like /ES or /NQ. cheers
If you don't want to be exposed to the upside risk (i.e. if you go short you are exposed if the price goes up) then just buy a long put. Or a put debit spread which will be a cheaper.
However, there are are lot of people also worried about a similar crash, so the price you will pay at the moment for this type of insurance is expensive. I know, because my trading strategy is to take the other side and sell that insurance.
As to eToro copy trading, no-one knows what is going to happen to price next, including eToro traders. You can see that because the market is so efficient (e.g. tiny bid/ask spreads on the main indexes via US brokerage platforms).
Personally, I wouldn't bother. If you are worried about your risk, just reduce exposure (e.g. remove money from the market). Or buy insurance as a hedge, accepting it will probably lose money. Buying puts is generally a losing game.
Hmmm - that worked out sooo well for Burry!
Betting against AI is at best brave - unless its a short term scalp type trade.
If the major investment banks and analysts have faith in NVDA, which going by the raised targets they do - then would seem that outside of MSM there's a feeling that the AI train has a way to run yet.
Betting against AI is at best brave - unless its a short term scalp type trade.
If the major investment banks and analysts have faith in NVDA, which going by the raised targets they do - then would seem that outside of MSM there's a feeling that the AI train has a way to run yet.
the entire IT industry knows AI is bubble of unprecedented proportions. There are flags in overhype, lack of understanding, lack of trust, lack of return on investment, governance, risk, market anomalies, circular share ownership, huge over-inflation, giant dependencies that are not realisable e.g. nuclear mega-datacentres on the moon... i could go on and on. It's showing all the hallmarks... it's just a matter of when.
You need to remember that it doesn't matter how good something actually is; it's only about the market perception of it.
I was more referring to copy traders as they would hedge across shorting and other strategies and use stop loss or whatever other instruments i only kind of slightly understand, so as to avoid/mitigate the 'infinite losses' scenario...
You need to remember that it doesn't matter how good something actually is; it's only about the market perception of it.
I was more referring to copy traders as they would hedge across shorting and other strategies and use stop loss or whatever other instruments i only kind of slightly understand, so as to avoid/mitigate the 'infinite losses' scenario...
Blown2CV said:
the entire IT industry knows AI is bubble of unprecedented proportions. There are flags in overhype, lack of understanding, lack of trust, lack of return on investment, governance, risk, market anomalies, circular share ownership, huge over-inflation, giant dependencies that are not realisable e.g. nuclear mega-datacentres on the moon... i could go on and on. It's showing all the hallmarks... it's just a matter of when.
You need to remember that it doesn't matter how good something actually is; it's only about the market perception of it.
I was more referring to copy traders as they would hedge across shorting and other strategies and use stop loss or whatever other instruments i only kind of slightly understand, so as to avoid/mitigate the 'infinite losses' scenario...
But you don’t know when, nobody does. So it’s all pointless isn’t it. You need to remember that it doesn't matter how good something actually is; it's only about the market perception of it.
I was more referring to copy traders as they would hedge across shorting and other strategies and use stop loss or whatever other instruments i only kind of slightly understand, so as to avoid/mitigate the 'infinite losses' scenario...
Mankers said:
If you only kind of slightly understand I would steer clear!
Markets are incredibly difficult to predict over the short term.
Remember the famous Keynes quote:
Markets can remain irrational longer than you can remain solvent particularly relevant when taking short positions.
is that not the whole point of copy trading... i would be outsourcing the understanding part.Markets are incredibly difficult to predict over the short term.
Remember the famous Keynes quote:
Markets can remain irrational longer than you can remain solvent particularly relevant when taking short positions.
okgo said:
Blown2CV said:
the entire IT industry knows AI is bubble of unprecedented proportions. There are flags in overhype, lack of understanding, lack of trust, lack of return on investment, governance, risk, market anomalies, circular share ownership, huge over-inflation, giant dependencies that are not realisable e.g. nuclear mega-datacentres on the moon... i could go on and on. It's showing all the hallmarks... it's just a matter of when.
You need to remember that it doesn't matter how good something actually is; it's only about the market perception of it.
I was more referring to copy traders as they would hedge across shorting and other strategies and use stop loss or whatever other instruments i only kind of slightly understand, so as to avoid/mitigate the 'infinite losses' scenario...
But you don t know when, nobody does. So it s all pointless isn t it. You need to remember that it doesn't matter how good something actually is; it's only about the market perception of it.
I was more referring to copy traders as they would hedge across shorting and other strategies and use stop loss or whatever other instruments i only kind of slightly understand, so as to avoid/mitigate the 'infinite losses' scenario...
Blown2CV said:
...
I was more referring to copy traders as they would hedge across shorting and other strategies and use stop loss or whatever other instruments i only kind of slightly understand, so as to avoid/mitigate the 'infinite losses' scenario...
Based on what you have described, you aren't going to suffer an 'infinite loss'. You might get something approaching that if you started shorting lets say individual pharma companies and it went wrong, but you are referring to "AI" and tech, which means you are going to be doing something more likely around an index. And equity indexes don't crash up in the way they can crash down.I was more referring to copy traders as they would hedge across shorting and other strategies and use stop loss or whatever other instruments i only kind of slightly understand, so as to avoid/mitigate the 'infinite losses' scenario...
As I said previously, no trader knows what is going to happen next with price. There is no doubt current prices are hard to justify based on traditional metrics, but then if/when we get to AGI, and companies solve self-driving etc etc, maybe current prices are cheap? No-one knows.
As for picking bearish eToro traders, not sure what track record you are going to use. I could setup 5 accounts, and run 5 different strategies, based on 5 different potential scenarios. One or two of those would end up looking very good. One or two would be terrible. The others would trade sideways. No doubt people would copy-trade the one which did well but of course that wouldn't mean I was a good trader - I just had more than one horse in the race so I wouldn't mind which one was going to win.
interesting points, but look at crypto. It's not inherently a bad idea, but it has catastrophically failed at its primary purpose - replacing fiat currency as a payment instrument. All it does now is act as something you gamble upon. The reason this happened is the public didn't understand it, didn't trust it, and the scammers came in and that was that. It doesn't matter how good a thing is, it matters what the mass appeal is. At the moment it's a gigantic silicon valley PE circle w
k off and then some of what are basically just toys like text and video generation.
k off and then some of what are basically just toys like text and video generation.The truth is that unless you try it, you will never know.
I've made plenty of mistakes in trading, and I have always learnt something new each time. Even if I lose money, I tend to think it is worthwhile. And of course there is a reasonable chance you will make money. So I'd say don't just talk about it, do it, and post up your results after a reasonable period of time has passed. Maybe include what you learnt from the experience.
I can point out some of the risks, point out how eToro traders can game the system by using multiple accounts running opposite strategies, but maybe you find something different.
I've made plenty of mistakes in trading, and I have always learnt something new each time. Even if I lose money, I tend to think it is worthwhile. And of course there is a reasonable chance you will make money. So I'd say don't just talk about it, do it, and post up your results after a reasonable period of time has passed. Maybe include what you learnt from the experience.
I can point out some of the risks, point out how eToro traders can game the system by using multiple accounts running opposite strategies, but maybe you find something different.
Blown2CV said:
it is very imminent. Softbank sold out $5Bn of Nvidia last week.
If you knew things you’d not be using SoftBank as an indicator for anything, they’re utterly useless. You’ve read a few articles and then used some confirmation bias to think you know something that isn’t possible to know. You will more than likely lose money here, I wouldn’t bother.
Blown2CV said:
fair enough... my original question though was does anyone know any good copy traders who have a shorting strategy in tech...
Have a look at the chart below for the Nasdaq. This is broadly speaking the "tech index" and what you would be looking to short.What you can see over more than a decade it has been an almost constant bull market (with the exception of 2022). So no trader can show a successful long term trading history shorting tech - everyone has been making money being long tech.
There might be traders who have made a profit in scalping, or shorting individual tech companies, but that isn't aligned with your thesis of AI being a bubble and wanting to short it.
So we could get another 2022 pull back, and it might happen next week, but it just as easily could go up 10% before any 'correction' happens.
happytobealive said:
If you are worried about your risk, just reduce exposure (e.g. remove money from the market).
This.If you are close to retirement or retired, and reliant on the income from the markets, remove enough cash for a buffer of a few years.
If you aren't, you will end up with a pile of cash and then having to judge when to go back in. And you will get that wrong!
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