Do You Know How To Short?

by | Aug 4, 2011

Alright – 8PM Sunday Night August 7th

Here is the plan for Sunday – and the rest of this week.

IF YOU ARE A NEW MEMBER – FIRST WEEK HERE PLEASE VISIT THE NEW MEMBER PAGE

Next two days in chat if you see stuff you don’t get  – leave a message in the comment section during the trading day and I’ll explain in seminar (unless of course it’s a text book set up and you clearly haven’t looked at anything we offer) …. but I doubt that will happen.

Secondly …..

People are afraid to short, have never shorted… refused to do it… and yet end up quitting, losing their cash and leave the market as a whole. Why? Because they keep being dip buyers and as you saw the past two weeks, it doesn’t always work.

I want to go over my mind set, what, how, why etc….

We’ll talk about not being lazy and getting up and reserving shares (couple folks complained they are west coast and its too early to reserve at 8:30AM EST … well … good less profits for you… more borrows for me) 🙂

Alright that’s it … have at it in the comment section!

36 Comments

  1. 1) – I always read in your scan that if a certain stock has parabolic move up, you short more into it, and consequently, if it has a morning wash out you sell into it. How come, the same method can’t be done for long positions. On wash outs, you average down, and on spikes you sell into? 

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  2. 2) At which point in time in a short position do you take the loss, move on and switch hands and position for a long etc..? Also I notice when you are long, you always mention a stop loss price right after going into the position. I’ve barely or maybe even never seen you mention a stop loss price on a short position? How come that would be the case having a stop loss on every long position, but not much on shorts? 

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  3. 3) When shorting late day fades, how can one be sure not to be trapped in a particular stock’s day low. For example you see fades, and you short into them. You then realize what you had shorted was very close to day’s low, and as a result the stock is about to rebound, perhaps still stay in red for the day, but from the point you shorted, it might move. How would you know of a true fade, vs a stock just hiding day low and you result in risking the bounce up and squeezing you? 

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  4. when you get stopped out of a late day fade set up because it breaks hod, at this point would you consider going long?

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  5. If you have a parabolic  move UP intraday with speed, should we look to start shorting small positions and average up towards the top of the parabolic or should we wait until it starts going back red to short the stock? I noticed you doing this on stocks very often: before they make a red move and are still going up strong you start shorting partial sizes.Also could you shed some light on the uptick rule as it is unclear as to when and how it applies from what I have read.

    I have noticed sometimes in  a late day fade the stock will make a tiny little green pop sometimes, do you recommend adding to the shorts in those pops or just cut losses short (especially if its above the price shorted at) and wait for it to go red again?

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  6. What broker has the best shorts? The one where I have my account apparently doesn’t have a lot of shorts that have come up in chat. Doesn’t have LNKD! Also, for the PNK stocks I can only see the numbers delayed 15 minutes. I don’t see how I could make any kind of play connected with those stocks if I am seeing delayed quotes.

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  7. Please speak to the availability of borrows at bst.  big board and otc.  i saw JAMN was avail. 🙂   thanks,  futurebound

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    • Can you rephrase?

      You request them… if they have them you’re allocated if not you’re not – not sure how to ‘speak of the avail of borrows’ …. can you maybe ask in a different way?

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  8. when i short into parabolics, or long spikedowns, it seems it keeps going in the original direction and i get stopped out. i know you only use candles and volume, but do you have specific rules of when to enter? For example, if its running on news you might not short into a spike?

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  9. I can’t get many stocks from fidelity online (find this annoying).  I have to call for them to get them tagged to my account.  I try to do my homework the night before and have a game plan.  I call into fidelity early before the market opens to get the stocks tagged to my account so I have them in case I want to short them.  A lot of times when I call, I get maybe 6 out of 10 that i am interested in.  Some aren’t available, so I can’t short them.

    If I ask for 10, and get 6, i might use 2 or 3 through out the day.  But at least I know I have them.   I find it annoying, but this is the only way for me to get them.  Question: Is there a better way? 

    The other issue I have is when there is an alert in the chatroom, and I would like to short, if i can’t get it right away online, by the time I call fidelity and they find the shares, it is normally to late.  So i feel i miss many opportunities.

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  10. Hello Im a Virgin never did this before. Will it hurt lol! I seen you had a lot of LNKD shorts can you go over those in seminar and show us what you see on the charts??

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  11. Can you show us on a chart what a parabolic move is?? How much does it have to be down to be called parabolic 10% 20% 30% etc?

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    • Please be sure to review the link I said to prepare with above – the first seminar listed goes over this in depth. Although I will cover some, if you’re asking it means you haven’t ventured out to review them. That is a MUST!

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  12. How long till you cover do you wait for ir to test and how many times ?

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    • What’s ir?

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      • it

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        • Can you rephrase? Unless this comment went with another one…

          How many times does a short have to test? Long?

          When to cover if it does/doesn’t break?

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          • yes sir.

  13. i like to review the chat logs after the trading day and compare what is said to the applicable charts. for example, friday at 9:35:19 you stated  ” shorted some lnkd “. looking at the 1 minute chart, i see a lower high than your entry. can you go over this scenario including the reason for your exit?

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  14. 4) What are your technical thoughts on the current market, moving from bearish to a flash crash, and now possibility of double dip recession and possibilities of dropping very big. Also what do you think of the S&P Downgrade, and overall opinion on what we should look for on DJI, SPX or COMP going forward. Any opinion on possible bounce, or at least a Relief rally? 

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    • I let the market tell me

      No sense predicting

      Bad news out all weekend .. We could go down another 500+

      Reply
      • Then with such emphasis, could you please 1. Talk about how to short SPY and 2. What a retail trader should look into when shorting SPY, at what levels, and how to scale into positions in case of a pull upward, or on a wash out, and how to secure profits. 

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        • We don’t play SPY … we trade high day rangers.

          I would suggest reviewing the new members page to get familiar with how we trade before asking a bunch of questions. Many will be answered just by reviewing. That should be your first homework. Once done…. then feel free to post as many questions as you’d like.

          We are traders, I don’t try to predict what stuff is going to do in a week from now, I don’t trade SPY hardly ever unless I’m real bored. I trade the set ups shown on the first seminar listed under the must reads.

          Please do this first. Put some time in this weekend

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          • I have gone through those seminars, I’ll be looking forward to Sunday’s Seminar. Feel free to answer or discard any question you may find repetitive. Thanks

          • ok great, and don’t take my responses the wrong way – just if we don’t cover it… if it’s general market … we don’t do it…

            There really isn’t an ‘edge’ in ETFs and SPY etc … sure you can make money but I just stick with what I am good at .. and that’s the day rangers… I’ve made good $$ with ETFs before but also haven’t lost a “lot” but … just had some big head aches… because in the end they are all structured to fail and reverse split and restart again …

            My goal for sunday is to start in layman’s terms and work my way up … because some people believe it or not (not that there is anything wrong with it….) cannot even get over the fact of shorting… it doesn’t make sense … etc .. THEN work up to what, how and why I’d take a short etc

  15. 5) What are the differences in shorting “Pump & Dumps” vs “Former Runners”. At which point do you short each, and what do they have in common, and what do they differ? They both seem to really pull the carpet under your leg as big moves happen very quick. At the same time, do you not miss the big drops they have from the top? 

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  16. If shorting with a bst acct will will the buying power be available for shorting? futurebound

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    • What does that mean? Will it be available for shorting? Will what be? you buying power?

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  17. I have the EF account, but don’t find myself using the Level 2 all that much?  I focus mainly on price action and chart(daily and six months…couldn’t find the 1 minute ones you speak of)…however have been struggling with entry points.  
    1.  Any suggestions on how I can improve entries on shorts?
    2.  Do I need the 1 min charts and Level 2? 
    Thanks

     

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  18. Earlier this week you held a partial s/s position o/n.  What indicators do you like to see when holding a s/s position o/n versus closing it out eod?

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    • I’d like to know IL’s indicators for holding longs o/n as well. It always feels like a total crapshoot to me…

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  19. Hi, I’ve noticed this past week, you’ve been more long biased buying a lot of the dips (PCS), scaling into positions (VHC) and they have rewarded you very well etc…. Going through the scan right now, it seems you are looking for big wash outs, to buy on the dips. Is the risk/reward better when the market drops like this, as a result giving you the opportunity to make easier faster money on dips? 

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  20. Should members with small accounts under 10K or even lower, short stocks on the scan such as LNKD. Given their price, despite the position size, sometimes it seems the risk is far outweighs the reward when you have very small position as by the time you get out, you may not have even covered your commission, that’s including being on the RIGHT side of the trade. Your thoughts on expensive stocks as shorts, for small account members? 

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  21. how can I see on a minute chart if its gonna squeeze me or not I mean if it tests I will get scared and cover no?

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    • That’s why u go in with a calculated risk at hand

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