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Registered User
Joined: 12/13/2004
Posts: 28
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How do I go about making a easyscan to identify short sale possibilities?
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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There is no defined set of criteria that make a stock a short sale candidate. You must decide what makes a stock a potential short. If you can tell me what stocks are potential shorts for YOU we can then scan for those conditions.
- Craig
Here to Help!
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Registered User
Joined: 12/13/2004
Posts: 28
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I'm sorry Craig to be unclear.but I don't know what makes a stock a potential short.Could you help me with that?T.Y.Denis
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Worden Trainer
Joined: 10/7/2004
Posts: 65,138
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This isn't the sort of question the Trainers can answer. I'll move this topci to the Stock and Market Talk forum where other traders will be more likely to see it and comment.
-Bruce
Personal Criteria Formulas
TC2000 Support Articles
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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dmolloy,
We trainers need you to find this out for yourself. This is an opinion we cannot offer. There is not criteria for making a stock a short candidate (if there was, everyone would short the same stocks!)
Do some research. Look at stocks that have made large falls. Were there clues before the fall? Look at a lot of charts. In order to get good at trading charts, you need to look at a ton of charts. The homework has the potential of paying off. Best part is when YOU find your OWN conditions for shorts, you will know why you are shorting the stocks you play (vs. shorting and not really knowing why.)
- Craig
Here to Help!
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Registered User
Joined: 12/2/2004
Posts: 37
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You must decide why you want to short a stock. What makes you think that a stock's price is going to fall? The Wordens and many others provide many examples and many times explain their reasoning. If you accept their arguments, then you may want to include them in your decision making process. You want to pay particular attention to those characteristics that can be modeled (create PCFs) in TC2005 (i.e., they are captured in the volume, price, earnings, etc. data included in the package. Qualitative changes, while important, are outside the realm of this "rules based" software tool. A change in mgmt team is a qualitative change that will be/was already reflected in the chart. However, you can't plug it directly. Some of the classic patterns that have been mentioned in this and other excellent forums are: prices rising on shrinking volume, price x volume diminishing at established tops (1,2,3), TC2005 indicators (TSV, BOP, MS, etc.) failing to confirm price rise, price remaining below a particular moving average (10DMA, 20DMA, 50DMA, 200DMA, or EMA's) for a certain duration (3 weeks ?), number of up vs. down days in past X days, number of large volume down days vs. number of large volume up days within a certain period, negative OBV, RS declining against major indices or sub-industry group, ad infinitum. You can include as many or as few measures as you think you need to make a decision. Many fine tomes on the subject of short selling are available. Many on line resources, as well. Again, pay particular attention to those ideas that can translate to the TC2005 canvas. Don't forget the money management side of this activity. Shorts consume more of your available capital per invested amount because of margin requirements. Effectively, and generally, you should consider that you're tying up twice the investment dollars when you short. Is another long position a better use of the deployable capital? Unless you're playing the entire market movements through ETFs and the like, you're picking individual stocks. Because of the capital margin restrictions, short rules, etc., you need to be especially good at selecting your short candidates. Do some quick calculations on ROI% before you enter a short position. And, remember your ROI% should be calculated using the direct investment plus the margin requirement. This is much longer than I intended. Good luck.
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Registered User
Joined: 1/17/2005
Posts: 2
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You're generally best off shorting in a bear market.
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