Is it stupid to short the top % gainers of the day?
- Thread starter koonsdawg
- Start date
Guys trust me it works. I really thought it was a crazy idea, and I learnt to do the oppossite. I got introduced to this method by a really nice guy called Dustin from Elitetrader, and I saw exactly what he was talking about.
I say do your research and see for yourself that it works. Not all of them go down, but as you practise this you get to know which ones will go down.
Thx
I say do your research and see for yourself that it works. Not all of them go down, but as you practise this you get to know which ones will go down.
Thx
Actually contrarian trading, which is what you're doing only works in the long run. In the short run there is +ve serial correlation in the long run there is -ve correlation. If you were shorting stocks that fell by 25%+ I would agree with you but if you're shorting stocks that fell by 2% you're gonna to get slaughtered!
Here are the exact odds on a strategy that shorts a stock as soon as ithey hit up 5% and holding them until the close. I think the key is to avoid that set up.
370 / 691 = 53.55% down $0.01 at the close
Average winner = $0.4807
Average loser = $-0.4952 (bigger than winner)
Net winnings = $29.20, (only up because the system traded 691 times over the 15 days I tested)
Best = $5.09
Worst = $-5.70
Casino Factor = 84.15%
However the opposite is not true. If you are looking to short stocks that are down big % terms then you are in good shape.
I don't want to give away the exact numbers cause I am banking on this one right now but you get the idea.
27 / 44 = 61.36% down $0.01 at the close
Average winner = $1.9911
Average loser = $-0.4718
Net winnings = $45.74
Best = $22.35
Worst = $-1.45
Casino Factor = 97.37%
370 / 691 = 53.55% down $0.01 at the close
Average winner = $0.4807
Average loser = $-0.4952 (bigger than winner)
Net winnings = $29.20, (only up because the system traded 691 times over the 15 days I tested)
Best = $5.09
Worst = $-5.70
Casino Factor = 84.15%
However the opposite is not true. If you are looking to short stocks that are down big % terms then you are in good shape.
I don't want to give away the exact numbers cause I am banking on this one right now but you get the idea.
27 / 44 = 61.36% down $0.01 at the close
Average winner = $1.9911
Average loser = $-0.4718
Net winnings = $45.74
Best = $22.35
Worst = $-1.45
Casino Factor = 97.37%
I have beeen shorting rising stocks too but it's very, very, very risky...if you get cought in the short squeezzzz and your stops will not help if stock keeps gapping up and moves violently fast.
Here some bad example..of mine. I don't mind sharing so you would learn.
I shorted ALGN at 15.90 but it kept going so fast that made my head sping...still have not covered...yes, broke one rule by not covering sooner.
Shorted MFW at 31.50 and it gapped up so fast that my stop at 31.65 was skpped...ignored.
I am not discouraging you just sharing..another mistake I made with ALGN I shorted within 2 minutes of open...but had I shorted later in the morning I would have made money...but as long saying goes "greed is what kills you"...tho I ain't dead yet.
Just some food for thought!
Here some bad example..of mine. I don't mind sharing so you would learn.
I shorted ALGN at 15.90 but it kept going so fast that made my head sping...still have not covered...yes, broke one rule by not covering sooner.
Shorted MFW at 31.50 and it gapped up so fast that my stop at 31.65 was skpped...ignored.
I am not discouraging you just sharing..another mistake I made with ALGN I shorted within 2 minutes of open...but had I shorted later in the morning I would have made money...but as long saying goes "greed is what kills you"...tho I ain't dead yet.
Just some food for thought!
I'd love to compare notes with the guys on here who were shorting the very same stocks I was long on this month.
Today, I was long TGX, CR, GYI, UNM, ITW, and KCI all at precisely 10:03-10:04 am.
I held all until 3:55 and sold off for a $1266 gain after commissions.
I didn't look at any charts, any news, NOTHING. I did one buy and one sell of each stock.
One thing about indicators, as you may or may not know, by nature indicators are lagging. I find it interesting that there are so many brilliant folks who talk from the couch.
I will post the exact stocks with the exact prices I am long on tomorrow. I would love for any of the brilliant folks on here to tell me at that time which ones were bad long choices and should have been shorts! I dare say that over any realistic time period, the results would be 50/50 or your guessing/indicators would be less than 50/50.
Today, I was long TGX, CR, GYI, UNM, ITW, and KCI all at precisely 10:03-10:04 am.
I held all until 3:55 and sold off for a $1266 gain after commissions.
I didn't look at any charts, any news, NOTHING. I did one buy and one sell of each stock.
One thing about indicators, as you may or may not know, by nature indicators are lagging. I find it interesting that there are so many brilliant folks who talk from the couch.
I will post the exact stocks with the exact prices I am long on tomorrow. I would love for any of the brilliant folks on here to tell me at that time which ones were bad long choices and should have been shorts! I dare say that over any realistic time period, the results would be 50/50 or your guessing/indicators would be less than 50/50.
There's a million ways to trade these things, really it comes down to whatever makes you comfortable. I was trading all the same stocks as you today and ended up $1k, so today you win 
I'm taking tomorrow off, but am interested in following your plays. I'm sure there's something we can learn from each other.
I'm taking tomorrow off, but am interested in following your plays. I'm sure there's something we can learn from each other.