What are the best SHORTING methods?

[lemonjello]

Ok. Everybody has run across many approaches to picking longs that are more or less successful. I've found that even the best long pickers seem to make horrendous short pickers.

I'm on a quest to find a the best short picking technique - fundamental, technical or otherwise.

My experience so far - most short pick methods turn out to be little better than 50/50 as opposed to long methods like, say the MM approach, which give a HUGE-ly better win rate.

[sisterwin2]

hell......... I need to learn options my self. As NBB does with his stocks. I think he buys a stock and to cover any possible lost buys an option to cover. Very smart. I think as of yet I am not smart enough. I love MM (when wife not looking) but he does have a few losses. I just cant believe he can not control Singapore better.. or the world trade, weather and such. I hear he can hit that little white ball well. I tend to get confused on calls/puts/bid/ask. I fear I will hit the wrong one and really blow it. I think it was Spike who gave me the site http://www.swing-trade-stocks.com/index.html that did help me learn how to look at sma/ema, when to go short/long. Hope it helps you. Good luck.

[DSteckler]

Sell high, buy low....<BG>

[skiracer]

Sell high, buy low....<BG>

Rudimentary an as profound an true as it can get Dave. Just have to find a way to do it.

[New-born baby]

hell......... I need to learn options my self. As NBB does with his stocks. I think he buys a stock and to cover any possible lost buys an option to cover. Very smart. I think as of yet I am not smart enough. I love MM (when wife not looking) but he does have a few losses. I just cant believe he can not control Singapore better.. or the world trade, weather and such. I hear he can hit that little white ball well. I tend to get confused on calls/puts/bid/ask. I fear I will hit the wrong one and really blow it. I think it was Spike who gave me the site http://www.swing-trade-stocks.com/index.html that did help me learn how to look at sma/ema, when to go short/long. Hope it helps you. Good luck.

Sis,
When you short you can cover yourself, too. It is called "a covered put." What happens is you sell the stock, and you sell a put, too. That gives you extra dough in case you were wrong about which direction the price is going.

MM is married. Look elsewhere. Remember, there are other fish in the sea.

[New-born baby]

Ok.

I'm on a quest to find a the best short picking technique - fundamental, technical or otherwise.

HANDS DOWN, MILDRED: TECHNICAL.

If you look to short stocks on a fundamental basis, you are going to die. "The market can stay irrational a lot longer than you can stay solvent."

[Lyehopper]

I have built several short searches and my favorite one finds stocks with the following....

Low RV
Low GRT
High P/S

Then I look at the chart and try to time my entry. I try to stay out of drug stocks because they always defy my short searches and I've been burned too many times shorting them. I look for stocks that have run up on speculation and not earnings (example: alternative energy)

Notice I shorted ESLR today in the POTW. I also took a real short position at about the same time. Of course market conditions help when short selling just as they do when buying long. It also pays to have a short list ready if the market flashes "bear" at you. I think it doing just that right now!

I will most likely short a couple of "featured" stocks in my tread before the week ends.

[lemonjello]

Looks interesting.

http://www.swing-trade-stocks.com/index.html that did help me learn how to look at sma/ema, when to go short/long. Hope it helps you. Good luck.

[lemonjello]

Why do I feel obligated to put something in this box?

That's the sort of thing I'm looking for - would you mind sharing what kind of approximate % wins do you get from your shorts?

Also, what are RV and GRT?

I have built several short searches and my favorite one finds stocks with the following....

Low RV
Low GRT
High P/S

Then I look at the chart and try to time my entry. I try to stay out of drug stocks because they always defy my short searches and I've been burned too many times shorting them. I look for stocks that have run up on speculation and not earnings (example: alternative energy)

Notice I shorted ESLR today in the POTW. I also took a real short position at about the same time. Of course market conditions help when short selling just as they do when buying long. It also pays to have a short list ready if the market flashes "bear" at you. I think it doing just that right now!

I will most likely short a couple of "featured" stocks in my tread before the week ends.

[spikefader]

I think most people know the type of stuff I'm gonna say about what are the best shorting methods....but I'll say it anyway.

You wanna base it off technicals. You wanna short into strength. You wanna short with a limit order preferably. You wanna short at resistance. You wanna look at high volume gap downs in the recent past. You wanna look at bearish channel action; channel busts, channel crashes, channel turn downs. You wanna look at double tops and Head and shoulders and broadening triangles. You wanna look for very bearish bollinger band action in the recent past. You wanna look for that awesome little setup known as Spike's Fuzzy 'C' short

But most of all, you wanna focus on trading a plan where your reward is ten-fold your risk and don't be afraid just because it's a short. Remember; stocks generally fall faster than they rise.

[New-born baby]

HUGE fall

Remember; stocks generally fall faster than they rise.

We should have learned that lesson today with MFLX.

[RL]

As soon as your stock goes down you sell and It goes up

[Lyehopper]

That's the sort of thing I'm looking for - would you mind sharing what kind of approximate % wins do you get from your shorts?

Also, what are RV and GRT?

RV= Relative Value
GRT= Growth Rate
P/S = Price to Sales Ratio

btw, I use Vector-Vest 6.0 and I use their value system which may differ from others. I think V-V has a good research tool.

My short gains?..... Look at the closed trades on my thread.LOL!.... Of course I just started that in March and the market ain't exactly been "short friendly" lately.... But I have gotten some really nice quick returns of 20-50%.... and I've also lost my butt right quick before.

I picked SIRF and chicken'd out before earnings.... In retrospect I was dead on target to short SIRF and had I stuck to my play I'd be up about 10% now. SIRF is still a good short down to the low $20's imo. It has a nice GRT but the P/S is a whopping 10+ and technically it's ripe to short.... I'm playing ESLR (short) right now and I'm lookin' at a couple more. Check out the following values....

ESLR (short)
RV= 0.39
GRT= 19
P/S= 18.92

ENER (short)
RV= 0.05
GRT= -8
P/S= 19.54

Compare these with two of my favorite (value) long picks....

JAH (long)
RV= 1.55
GRT= 25
P/S= 0.70

CVGI (long)
RV= 1.47
GRT= 36
P/S= 0.53

I think that if you can identify stocks that are way out of balance on price you just need to stalk them untill the chart says "short it"..... Same with identifying a great (long) value growth stock and stalking it for a good entry.

That's my basic strategy. I know there are tons of stocks "in between" and sometimes I deviate from the above. Example: ECOL.... I liked it because I liked their business and growth prospects and it was relatively an unknown stock. I was right about it too.... Similar reasoning for my attraction to ACTU (long).

Follow the POTW and my "Roundup" thread and see how I do on some of these.

[DSteckler]

Lye, the abbreviation PSR is commonly used to mean Price/Sales Ratio.

[Lyehopper]

Lye, the abbreviation PSR is commonly used to mean Price/Sales Ratio.

Thanks.... Kinda like PE for Price/Earnings Ratio....