SHORTING - Anyone doing it here?

Discussion in 'Trading' started by billpritjr, May 17, 2003.

  1. Anybody like to short sell out there?

    Wanted to stir up discussion on why, what, when, you decide to short sell.

    I personally am a trend follower and will go long and short whenever the trend dictates, I dont prefer one or the other.

    The shorts seem to become profitable quicker, possibly because people head to the exits faster than when people are investing/buying long.

    anyway, wanted to get a new thread going

    see ya
  2. Who ISN't shorting?

    Shorting is a must for day-trading. Maybe I misread your post.
  3. funky


    like you and anyone who calls him/herself a trader, i go long and short as the market tells me to. going long and short, however, is not the same, as you mention. i trade intraday volitility breakouts in the nasdaq 100, and I'll give you a little taste of what i've experienced so far doing both (sorry i know this is a shorting topic, but i couldn't resist)....

    longs come in many flavors. entries are most definitely easier b/c of the uptick rule. entries tend to be better for me when hitting the offer sitting right on the moving average (i use a 34ema on 1-min an 5-min charts) after the resistence has been broken. however, sometimes you can miss the initial wave by using this technique -- my choice, right now, is less risk and possibly missing that first wave. Lately, and in this type of market, this will almost always be the best entry. I suppose its because of the momentum being not as strong as it used to be. This is a great example of how you must adapt to the current market, or suffer a drawdown in your capital. your choice. exits are typically much easier as well as there is always a bucket full of posers buying into an old uptrend (can't miss the move!). you will always retest the prior resistence before heading lower. once the resistence holds, this is the time to sell, after a quick check with the NDX. as the professionals come out, lots of posers are stuck with a bigger bag than any of them want, and down falls the stock. ironically, alot of beginners and traders, on quite the occasion in the past 2 months, <insert sarcasm> have made money because of the buy&hold days we've had. this has turned out to be quite a strategy. :(

    shorts are tricky, but once you learn them its just another deal. i've been noticing that the uptick rule hasn't been effecting me as much lately, and i think i might know why. many programs are now creating their own upticks (its another option like "bullets", or married puts), as a way to avoid the uptick rule. this, in turn, causes the market to pretty much free itself of this problem, allowing traders to easily find an uptick to short at least until the posers catch on (usually 1-5 cents away from the entry). after that, if its gonna break, see ya at the next stop buddy. everybody who bought with hope has their stock and the bids dry up. luckily, many shorts offer a roundtrip experience on the initial squeze. I suppose if you're good enough, you can try to get the initial down move, the squeeze, and then be short for the 2nd wave. i'm not this talented yet. but much more profit to be earned on a short, i must say. anyhoo, back to my entries on shorts...i like to also get confirmation from the NDX, as shorts tend to richocet hard when they are false breakouts, with the upside tendancies of the crowd. once it breaks though, its all the tape. i am good enough to see the squeeze now, and its all about volume. after its dropped in the first wave you can literally forget the actual price and focus on the volume. get a volume indicator or watch the prints. if you see volume die, take the price action with a grain of salt. i don't get worried until i see volume come in. then you can refocus on the price. very rarely will you have a 'V' bottom, so even if you're not gonna get the 2nd wave, you still have the freefall back down as all the posers watch their 'i covered too quickly missed profits'. if the market reverses or has no momentum, as soon as the price stops, cover. bids will quickly eliminate many of your hard earned profits. if you're getting the 2nd wave, well, its here we go all over again, except you see, the market has weeded out a bunch of newbies on the first wave who were too scared now to get back into a trade (that was a market conspiracy against them), and you don't get as much of a squeeze now. same for 3rd wave if you get there. it will become flatter and flatter. the NDX will usually clear the 1-min 34ema to the upside before any action occurs in the stock i'm in. or the stock's price itself will form a few bars to the upside of its 1-min 34ema. this is after a good downtrend with 2 or 3 waves...either way, its usually plenty of time to cover. by this time, the falling knife has slashed itself across its participants and the bulls are nowhere to be found. so exits are easier than longs in that sense.

    my .0199 cents worth
  4. JT47319


    Nice thing about the e-minis is that there is no uptick rule.

    Nor does your broker actually need to have the stock in house. You just need to find a buyer out there.
  5. While it makes sense to me to be open to trading both from the long and short sides depending on circumstances, the fact is, I know of successful traders that ONLY trade long, and others that ONLY trade short. Regardless of market trends. (Nothing goes straight up or straight down, so there are certainly, in theory, always opportunities to do this).

    To me, this seems kind of limiting, but you can't argue with success.

    And while I agree that it seems generally that things seem to go down faster than they go up, and this bodes well for traders with a short bias, maybe it's my imagination, but I never seem to see my long positions go up as fast as what my obvious shorts (maybe that's part of my problem. Maybe my shorts are just too obvious). Find a nice weak stock, short it, and if it goes against you, boy, so often they seem to go against you fast!!!

    I trade the same stocks day in and day out. And often I will both buy and short the same issue on the same day (I know that for you mini future traders, this is even more commonplace).

    My bigger swings are definitely in shorts. My average gain is greater than my average gain in longs, and my average loss in shorts is greater than my average loss in longs.

    My overall average dollar per share, however, is better in long trades. So I do tend to have a greater percentage of long trades. Less stressful (less sudden movement), and a slightly higher winning percentage.

    I also admit to just LIKING trading the long side more. But I try to keep my emotions out of it. I admit that I can't seem to completely. The "feeling" is real, and I know it affects my overall style. Here, I could write a long essay on discipline, timing, and emotion. But without going into details, I believe the fact that I "like" trading the long side makes me a better trader when I am long than I am when I am short.

  6. With Spreads we are always long and short. We short trends by reversing our positions.
  7. Donkell


    I agree to be a more profitable you have to be able to both short and go long.
    The market is in an uptrend right now and you have to be careful.

    Example: I shorted YHOO on Tues after it had trouble breaking it's 52 week high at 26.25. Around 26.90 it seemed to level off and I shorted 2K shares, since it was at it's 52 week high I was not worried about a short squeeze. All three internet stocks decided (EBAY, YHOO & AMZN) it wanted to go higher. As I watched my money going down the drain I shorted again at 27.30 for another 2k ( I know what they say about doubling down) but I disagree. After a short pull back YHOO was off to the races and hit 27.68. I was able to get another 2k near 27.50 and change and waited. It finally fell to 27.20's pausing then pushed on down a bit more when I could see buyers coming back in, so I covered for 27.15. YHOO closed at 27.22. Friday it closed at 27.75 after hitting 28.00.
    Without a decent size account and braking the "never double down rule) I came out of it near $1,000.

    Just my recent story.
  8. I personally could not imagine a trading system that only looks at half the possibilities and does not short the market.
  9. Friday's trades.

    SHORT 1000 TGT @ 34.40 and covered at 34.10. A nice 300 gain. TGT later closed at 34.05.

    I got a fill on SHORT 700(wanted 1000) BEBE @ 15.90. BEBE LOD was 15.42. I should've taken my profits at the 15.50 mark, but I got greedy. Got to learn to take my singles. Later covered at 15.80. BEBE closed at 15.78.

    To be a sucessful trader, you have to be able to trade both ways.

    Good Luck trading... :)
  10. It appears alot of you are day trading or shorting over just a few days

    anyone shorting over 1-3 months?


    AMR in Dec 2002, until March 2003

    JPM in Sep 2002 until mid Oct 2002

    AZO late Nov 02 until mid Feb 03

    all would have resulted in profits, without transaction costs associated with trading multiple times a day

    just curious, many trading styles and methods out there, if we all put money in our pocket, then thats all that matters!

    see ya

    #10     May 18, 2003