Professional Day Trading Short Sellers

[lwlee]

Totally agree that the vast majority want to get rich off subscription fees. So if you blindly assume that they were all charlatans, it's probably for the better.
But some of the ideas that come out of the chaos can be noteworthy. Play the FRD, not FGD. The larger the pop up, the harder the pop down. Reinforce the trade by checking the cash flow position of the company, need cash? check flash-sec to see if dilution is imminent. Analyze dollar block to determine when volume exhaustion is due. Check the historical chart to see if there are multiple pops and drops. Some small caps are serial poster of news to get pops. If you do your homework, the statistics will prove it out.

As for auditing, at least some of the gurus have shown "audited" reports that I know of, Dux and Ross. There was some questions about Dux's audit report which I don't think he ever addressed. So some skeptics have thrown some shade on audited reports being faked. I would love for any of these gurus to take a challenge whereby they trade one of their biggest critics' trading account for one month. It's enough time to prove out if they are legit or not. Easiest way to silence people is to make them rich. Dux had an audited report where he took $40k to $200K+ in one month. He can trade my account for one month and just take it to $80k and I will sing his praises. LOL.

The problem with all these fake gurus is that not a single one of them shows an actual audited statement. So they can claim anything they want
If you are very convinced that you can replicate their strategy just try trading it live with small sizes and you will see for yourself what the flaws are, if any. Or you can become even richer than them since these guys don't put in all their effort into trading full time and instead concentrate more on marketing.

 

[traider]

Totally agree that the vast majority want to get rich off subscription fees. So if you blindly assume that they were all charlatans, it's probably for the better.
But some of the ideas that come out of the chaos can be noteworthy. Play the FRD, not FGD. The larger the pop up, the harder the pop down. Reinforce the trade by checking the cash flow position of the company, need cash? dilution is imminent. Analyze dollar block to determine when volume exhaustion is due. Check the historical chart to see if there are multiple pops and drops. Some small caps are serial poster of news to get pops. If you do your homework, the statistics will prove it out.

As for auditing, at least some of the gurus have shown "audited" reports that I know of, Dux and Ross. There was some questions about Dux's audit report which I don't think he ever addressed. So some skeptics have thrown some shade on audited reports being faked. I would love for any of these gurus to take a challenge whereby they trade one of their biggest critics' trading account for one month. It's enough time to prove out if they are legit or not. Easiest way to silence people is to make them rich.

Companies can defy fundamentals and stay way overvalued, look at GME. Of course if you do a lot more research it does skew the odds in your favor but a lot of these gurus don't show that. Instead they talk about things like ABCD patterns and funny magic TA lines. Not saying that you can't make a living out of this especially if you get good in the niche but you have to be critical of all these furus.

 

[lwlee]

I like to comment on the GME thing. Traditional fundamentals to calculate proper value have been blown out of the water. Fed monetary policy has caused huge spikes in valuation, just look at the SP500 from 2009 to now. 1500 to 4500+. 3x. Yet people are amazed that GME and AMC can hold their crazy valuations? You mix in the "APES" and options game "gamma squeezing" and all the traditional and even not so traditional guys are gonna get blown out of the water. Burry. Eichhorn. Guys I respected but have prove too rigid in the end.

Companies can defy fundamentals and stay way overvalued, look at GME. Of course if you do a lot more research it does skew the odds in your favor but a lot of these gurus don't show that. Instead they talk about things like ABCD patterns and funny magic TA lines. Not saying that you can't make a living out of this especially if you get good in the niche but you have to be critical of all these furus.

 

[GotherL]

Point taken.

- But truthfully speaking, what's the likely hood that something is halted for months? Halts generally happen for news or volatile action which is then resumed trading.

Long halts are generally paradise for short positions due to SEC investigation and almost always ends up lower. There is no need to panic if your on the short side.

 

[TraderHamlet]

Hardest part is locating borrows at reasonable rates. Try doing that.
Also wait till you are short something that is HTB and it is halted for months. You lose a year's profits just paying the borrow fees.

But truthfully speaking, what's the likely hood that something is halted for months? Halts generally happen for news or volatile action which is then resumed trading.

Look at SVA https://www.nasdaqtrader.com/trader.aspx?id=tradehalts

https://en.m.wikipedia.org/wiki/Sinovac_Biotech
'The company was listed on the NASDAQ but the exchange halted Sinovac's trading in February 2019 due to a proxy fight.[4][5] The company has faced bribery probes in China.[4]'

Now, what you're gonna do if you're stuck short in SVA?

This is just an example. Can happen to any stock at any time.

btw, https://finance.yahoo.com/news/hedge-fund-iszo-says-jefferies-130000061.html

 

[traider]

Halts over extended period of time extract a heavy toll when borrow fees are extremely high
This is just one of many risks in shorting
There is no urgency to resolve these situations as it is not a revenue center

 

[JSOP]

There is nothing mysterious or superior about short selling. It's really just the flip of long buying. Trading is very complex but is also very simple. If you think the price will go up, you buy. If you think the price will go down, you sell. It's just that when you don't have the stock to sell, you have to borrow the stock to sell, thus giving rise to the concept of short selling. The only problem with short selling is the risk management issue. Because of the theoretical possibility of unlimited price increase that exists, the risk for potentially unlimited loss with short selling is also higher thus the need for prudent risk management for short selling is also higher. That's all.

 

[GotherL]

There is nothing superior about short selling.

I wouldn't say it's superior but there is a difference & why many traders prefer the short selling route over low floats due to the fact it's very difficult or at times impossible for retail to catch the bottom on these runners.

With shorting you have a lot more time finding tops vs the bottom that happens in nanoseconds.

Overall, I believe I was def more consistent when shorting vs long but it's just not my cup of tea.

I don't like the idea of being unable to make more than 100% on a trade.

That is why I switched to options. More time for prep and the % gain is unlimited.

 

[FreeGoldRush]

Damnnn that's some fancy rocket science shit there.

People have different levels of risk tolerance. My trading style is likely far more rigid than you would like but I sleep well and generate a good return with a low standard deviation. My database and servers are miles ahead of spreadsheets. It's engineered and professional.

But I'm old enough to realize that people have vastly different skill sets that ultimately achieve the same goal. If spreadsheets and stock charts get it done for you then fantastic. I personally have analyzed the data enough to know there are risks you are likely overlooking but we don't have to agree on that.

 

[FreeGoldRush]

But from this chaos came a group of millenials, GenZ who figured out by using statistics, the rewards far outstripped S&P 8% historical return.

Surely you are aware that quantitative trading strategies have been used since the 1980s. Ren Tech?? Millennials and Gen Z are hardly the first to try and use math to trade markets.

At least you and I could probably agree that math is a powerful tool when trading. We would disagree on risk management. lol.