Profitable Shorting?

Discussion in 'Trading' started by mixawhat, Dec 23, 2003.

  1. mixawhat


    I left a message a few days ago regarding the same issue...but somehow it was deleted.

    My question is...what technique are you traders finding to be profitable without being able to use bullets anymore. Obviously, if you short along with the the 10-50k that slowly follows the last print down, you'll get a crapy fill if you get filled at all. And when you finally do get filled you're going to have to withstand the nasty squeeze that comes along with it. Or is the best way to avoid shorting along with the masses...and wait until it squeezes about 30-50c or whatever and then hits the major resistance if you're lucky to see the offer being reloaded? Any suggestions? I seem to be squeezed out of great positions which my intuition was correct.
  2. I short every day, my ratio of shorts to longs is 12:1 My last losing day was Oct 30, 2003.
    Some stocks over-react to good news, then pull back.
    Thats where a professional shortologist comes in.
    I seem to always short shy of the top, I catch an uptick, but usally not the last uptick, but when it comes down I'm there to cover. My median trade time is a hold of 27 minutes, but I have had them last up to four days.
    I trade stocks in the $50 range, and I usally cover after about a $0.40 profit per share. I enter in four 1000 share transactions, then set my cover point in one 4000 share buy.

    The up-tick rule doesn't bother me one bit. If it wasn't there every jackass from NY to Honolulu would be playing my game.

    I no longer reveal the stocks I trade, but they are NAZ techs and I am usually short before the market is 30 minutes old.

    This is a good market for shortologists, although I wouldn't recommend it for traders who want to hold short.
  3. mixawhat


    "I seem to always short shy of the top, I catch an uptick, but usually not the last uptick, but when it comes down I'm there to cover. My median trade time is a hold of 27 minutes, but I have had them last up to four days."

    so i assume you are shorting these stocks as they're ripping up in the morning on good news. what helps you decide on when to get in...when there is a nice spread...signifying the end of the road? or you just see obvious resistance? how about when to get out and cut your losses? how about taking your profits...what helps you determine when to lock them in?

    thanx for your reply.
  4. Shortologist Sez

    Ok, today, Dec 24, I shorted between 21 and 23 minutes after the market opened. Again I missed the top. Then 3 hours 18 minutes into the market I covered. Missed the bottem also.
    I made .44 per share, on 4000 shares, a $55 stock.

    Christmas Eve so I gotta go, but will explain my rationale later.
  5. Does Shortologist trade more than one stock? Some short specialists know their stock so well that they never use TA and a minimum of charts. In school we called it the Meteorologist method of trading, always looking out the window to see what is happening, not staring at Bollinger Bands. Works very well, especially for some short specialists. Theres about 10 guys on this board who do it.
  6. peter77


    I trade a style similar to the Shortologist, I move in 1000 lots and trade about 3000 per day, try for about .35 profit and basically trade off of sentiment. I usually make my first move very early in the market. I only trade one stock although I am thinking about adding INTU to my reportiore.

    One difference for me is I never go long. Never. (except by accident one or twice).

    I also don't rely on Technical Analysis, I have found that with manipulation of time frame I can get a buy/sell signal that is opposed to the one I am relying on, so I gave up on that.

    I trained under Geezer in New York, and met Shortologist there. I also have a day job and do this part-time.

    Geezer posts here every couple of months.
  7. kowboy


    I would like to hear more please.

    Do you have a standard set of stocks to trade, and if so how many?

    Or are you always looking for new stocks to trade every day?

    How do you pick your candidates?

    Thanks for any feedback, as it sounds most interesting and a very exciting way to trade.
  8. kowboy


    I was looking at Intu this morning. Hard to tell an entry for a short. What conditions are you looking for to enter a short?
  9. Not wanting to turn this into a journal, but on today, Dec 26, I went short in two moves, one at 18 minutes into the market and one at 30 minutes into the market. Then I got out at exactly 2 hours 30 minutes into the market. This yielded an average profit of .29 per share.

    I had decided the market would show bullish off the mark but had no real reason to sustain so would pull back. My decision to wait for an uptrend was based on my reading of the news, and the poll that I looked at on under the Fearless forecasters section there is a daily sentiment poll. Often only 50-70 traders take part but I consider it relevant. Then the futures were up this morning, and there was widespread commentary that the market had over-reacted to BSE concerns on the 24th. It looked like a classic jump and fall situation, so I went for it. I tried to hold out for a bigger profit but couldn't see it happening so gave up and covered.

    My stock selection is from tech capital equipment. LRCX, KLAC, AMAT and NVLS. These stocks behave in a fashion I understand. The theory is that if you make selections from actual semiconductor producers, or users of semis, then you are too close to picking winners and losers, which is very hard to do in tech. If you pick the semi-equiipment manufacturers you are two steps removed from winners and losers so have a smoother curve. Don't bother explaining to me the counter arguments, I know them and this group works for my style.

    Bottom line, as Peter says, some traders know how to read sentiment rather than fiddle around with TA. Some traders consider our art to be hocus-pocus but short-sellers do it all the time.

    Something just occured to me. I have an Arts degree and I consider my style of trading to be an art. A couple of my trading buddies have Science degrees and they are totally into TA and they consider their trading style to be a science. Humm. Anyway us Arts types consistently outperform our science buddies in our little trading fraternity here in SD.

    Awwwg, just looked at a chart, I covered too early again

  10. mixawhat


    thank you for your responses. does your strategy work with stocks on the nyse or primarily with nasdaq stocks? also, when you were referring to semiconductor kind of lost me there regarding 1st or 2nd tiers. do you mean semiconductor equipment...intc, amat, klac, etc. avoiding other stocks sort of related to the industry. i used to play the semis, when i primarily traded nasdaq but now ive only been trading nyse stocks for the last year...and primarily tape read. but i have had an itch to get back into trading the crack in nasdaq. what helps you determine the top? or when to get in?
    #10     Dec 27, 2003