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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: bajasurf who wrote (3620)	9/6/1999 3:11:00 AM
From: Tai Jin	Read Replies (5) \| Respond to of 18137

If I may jump in... I've done a lot of shorting, and many times I've shorted too soon only to cover at a loss. But that only happens when I get in too deep too soon. On Friday I shorted IIJI on it's runup. The exponential increase indicated to me that it was unsustainable and near a top. I started shorting at 59 1/2 with a 25% position. Then I continued to short 25% positions at 60, 61 3/4, and 64. I wanted to short more at 64+ but I waited too long. I ended up covering at 59 7/8 and 60 for a decent profit. I understand the difficulty in shorting when the stock is coming down, that's why I tend to short when it's still going up. But the important thing to remember is to scale into your position as the stock goes up. Alternatively, you can take a small position and stop out for a small loss and short again when the stock is showing some weakness. I try to use stochastics and DMI to determine when the stock is near the top of its run. ...tai

To: bajasurf who wrote (3620)	9/6/1999 10:57:00 AM
From: Dave O.	Respond to of 18137

< it seems the only safe way to do this is after a stock peaks. Where do like to enter and how do you protect yourselve from a runaway on the upside > I look at end of day data and run my scans and develop a list of long & short candidates for the next day. If we open strong the following day I tend to look at the short list more closely anticipating some pullback and vice versa. I try to protect myself by not taking too big a position. I'm not someone who buys 1000 shares of whatever stock at whatever price. Rather, I tend to make most trades in the $15K-$20K range (i.e 500+ shares of a $30 stock, 100+ shares of a $150 stock) and look for a couple hundred $$ per trade. I always pick technically extended stocks for shorting. Never had any run away from me as I don't play internets or stocks like RMBS. Dave