How do you know when to short a stock? Do you really have to spend hours...

Skullbone
Skullbone

How do you know when to short a stock? Do you really have to spend hours studying charts and going over company financial reports to "Know" when it's about to take a shit?

Or is it really all an inside game like in the movies?

All urls found in this thread:
https://www.youtube.com/watch?v=n1vNROeKKaU
http://www.timothysykes.com/an-american-hedgefund/index_files/AnAmericanHedgeFund.pdf
Emberburn
Emberburn

@Skullbone
both, but if you do the former you can get an idea about how the latter is going to turn out.

Emberfire
Emberfire

No one actually shorts it's a meme

Flameblow
Flameblow

@Skullbone
Chart analysis is a meme. Just pay attention to the news and short companies that you think are going to fuck up.

RavySnake
RavySnake

shorting
why the fuck would you expose yourself to end up in debt

just use fundamental analysis and pray to satoshi that you have luck.

BlogWobbles
BlogWobbles

@RavySnake
That's not what worries me, I can always use a trailing stop to keep from bankrupting myself.

Firespawn
Firespawn

@Skullbone
You need to understand the business and how events affect the business to be able to successfully short. You make money shorting because prices (the charts) and fundamentals in the business don't match, and hope that at some point everyone else realizes its a shitty deal and they sell.

For example, if you knew enough about the crude oil supply chain you could tell that US oil production was rising exponentially and that the $100 a barrel was not going to hold up. One could also have figured with enough research that the industry was getting more and more efficient and saudi's were shooting themselves in the foot by flooding the market. Now the saudi government is tapping into savings to survive.

I would be shorting arab oil state bonds and companies. The only thing that can save them is including US oil producers into OPEC and pray that eveyone in OPEC sticks to the plan.

Boy_vs_Girl
Boy_vs_Girl

The only times to short are when you're hedging something (such as market risk) or when discover something fundamentally wrong with a company (such as fraudulent accounting or the company is in a position where it could easily, or is on track to go under). 'Overvaluation' is never reason enough to short something.

happy_sad
happy_sad

How do you know when to long one?
It's just evaluation.
I shorted the fuck out of GoPro, because they suck balls. No "inside knowledge".

iluvmen
iluvmen

Read up on Tim Sykes. Now I know he's a salesman, but he legit made millions from shorting fraudulent stocks. He has an interesting technique. Ignore his sales pitch crap.

TreeEater
TreeEater

@Emberfire
newfag gtfo.

Nude_Bikergirl
Nude_Bikergirl

@RavySnake
losing over 100% of your capital by shorting.
Are you fucking retarded?

girlDog
girlDog

@Nude_Bikergirl
Shorting has unlimited risk of loss. Unlimited. Chew on that for a while.

And no your stops aren't going to save you when the stock gaps on news and you miss your exit target entirely. Chapter 7 anyone?

Evil_kitten
Evil_kitten

@girlDog
having 100% of your capital on one short
having your short on something that has binary events that will drive it up over 100%
having so little capital you'll get called immediately
having a broker that will let you accure unlimited losses before calling you
being retarded
I remember being 16 and discovering what a short was too.

haveahappyday
haveahappyday

@Evil_kitten
having 100% of your capital on one short
The % of your capital in the short doesn't matter when the risk of loss is unlimited. You can, and some do, lose more than your original investment.
having a broker that will let you accure unlimited losses before calling you
You seriously think counting on your broker, who profits from your open position, to save you is a good plan?

Talk about sounding like a child. I guess the good news is you're too young to have a brokerage account, so you have time to learn.

5mileys
5mileys

@haveahappyday
10,000 on a short position
stock moves up 200% (and for some reason you didn't cover like a retard)
have to cover the 20,000 with the remainder of your account worth 100,000
Literally you have to be a living meme to put yourself in the hole more than that.

You seriously think counting on your broker
Yeah, its almost like they want to collect or something. But I guess you knowing what "risk management" is went out the window a long time ago huh?
Pls never invest.

w8t4u
w8t4u

@haveahappyday
Brokers can't pursue you for margin debt and FINRA requires brokers to liquidate their client's margined positions when the client fails to meet the maintenance requirement. In order for a client to keep a margined position which has accrued a substantial loss, they have to put up additional margin otherwise the position gets liquidated.

~The more you know.

iluvmen
iluvmen

@5mileys
So your great plan is that you'll be smart enough to prevent a catastrophic loss when you were already dumb enough to suffer a 100% loss? Because of ... magic?

Thanks for the lels, kid.

@w8t4u
Brokers can't pursue you for margin debt and FINRA requires brokers to liquidate their client's margined positions when the client fails to meet the maintenance requirement. In order for a client to keep a margined position which has accrued a substantial loss, they have to put up additional margin otherwise the position gets liquidated.
by which point you've already incurred a catastrophic loss that can well exceed your original investment.

-The more you know

I thought summer was over. Why are all the kids here today?

Playboyize
Playboyize

@iluvmen
So your great plan is that you'll be smart enough to prevent a catastrophic loss when you were already dumb enough to suffer a 100% loss? Because of ... magic?
No you dense fuck, I'm saying your "unlimited losses" meme is ridiculous.

Gigastrength
Gigastrength

@iluvmen
No, actually, the entire point of the FINRA margin rules is to prevent any client of a broker from achieving a negative equity position--meaning that the client will be forced to either have his short forcibly liquidated or he has to put up additional margin as to not be below the maintenance requirement.

SniperWish
SniperWish

@Evil_kitten
Shit like this can happen to anyone
https://www.youtube.com/watch?v=n1vNROeKKaU

RavySnake
RavySnake

@SniperWish
be retarded
use no risk management
get fucked in the ass
Wow what a shock.

RumChicken
RumChicken

yeah shit like the holocaust

BunnyJinx
BunnyJinx

@Playboyize
Oh, so you mean it's no possible to lose all the wealth of the universe on one trade? Wow, I'm so impressed at your literal knowledge of the markets. Tutor me senpai.

@Gigastrength
It's a sanity check, I understand, but you seem to be missing the larger point. These rules are designed to prevent only the most catastrophically bad financial situations possible The regulations are not there to hold your hand and nudge you into smarter decisions. You are always permitted to make horrifically bad trades and incur substantial losses, and neither the SEC nor your broker care. If you actually go so far as to trigger the safety valves, you're already fucked, genius.

CodeBuns
CodeBuns

shorting ever unless you have george soros tier insider information to guarantee a win
enjoy bankruptcy

Sir_Gallonhead
Sir_Gallonhead

@SniperWish
Thats a scam. He supposedly owed 100k but was only begging for 5k.

He was never in debt. He was playing people.

takes2long
takes2long

@Skullbone
Both.

kizzmybutt
kizzmybutt

@Nude_Bikergirl
@Evil_kitten
@5mileys
@Playboyize
@RavySnake
Never took Calculus 1.
Does not understand limit theory.
Do not engage.

Playboyize
Playboyize

@RavySnake
What is a LEAPS contract?

RumChicken
RumChicken

@BunnyJinx
horrifically bad trades
This is really only going to hold true for utter crap. You might lose some money if you shorted Facebook or something, but no one is going to pay 100X or even 10X the share price to buy them out (bankrupting you).
So maybe rephrase your point.
"You could lose more than 100% of your investment by shorting risky equities".
Not too much different than losing 100% on shitty OTC/penny stocks.

Lunatick
Lunatick

@Skullbone

Insider knowledge, DUHH.

w8t4u
w8t4u

@RumChicken
The morons on Veeky Forums don't really short bluechips because there's not enough money to be gambled. They short penny stocks and leveraged ETFs. Spend some time reading threads and you'll realize the true depths of stupidity that frequent this board.

5mileys
5mileys

@w8t4u
You don't say.

RumChicken
RumChicken

@w8t4u
I only short blue chips.

GoogleCat
GoogleCat

@RumChicken
I only short blue chips.
Pretty stupid strategy. Not as risky as shorting more volatile securities, but still a losing proposition over any meaningful number of trades. By definition, you're trying to predict short-term price movements, which study after study has proven is not possible in a reliable manner. Coupled with your trading costs and horribly inefficient tax strategy, you're at least 95% likely to underperform.

Using a stupid investment strategy is still stupid, even if it's not the most stupid one possible.

King_Martha
King_Martha

@5mileys
i thought that was shorting when i was a noob lol

anyway, just never short, too much risk

Garbage Can Lid
Garbage Can Lid

@BunnyJinx
These rules are designed to prevent only the most catastrophically bad financial situations
@iluvmen
by which point you've already incurred a catastrophic loss

How's the cognitive dissonance going?

Spamalot
Spamalot

@iluvmen
Just read his book. Trust me, it's a lot more of the actual Tim Sykes than his shit ass salesman gig, it's also a lot more informative. It's the only time I've seen him drop the bullshit, anywhere, except in personal conversation. Then he is just a jackass. But this book is legitimately insightful, and so is his story. Though yes, he was born a rich Jew, started with $10k in free money, and traded during the tech boom.

PDF: http://www.timothysykes.com/an-american-hedgefund/index_files/AnAmericanHedgeFund.pdf

happy_sad
happy_sad

@King_Martha
i thought that was shorting when i was a noob lol
Why? Who the fuck told you that? I learned what shorting was like, day two, because I could read.

5mileys
5mileys

You enter a short position with a stop to buy placed just above recent high
next morning at the open the stock gaps up 63 handles on surprise news
your stop gets activated at the open as a buy market order which gets filled lifting the offer at 63 handles above your entry. Its important to note there was no liquidity lower in the in the orderbook to fill your buy market order so you could only get out a a huge loss.

Methshot
Methshot

@Skullbone
When you read something like this, your short the company taking it in the bum.

CouchChiller
CouchChiller

>>1476982
That's not really the strategy. They both go long all the time, it's half and half man. It really depends on the market environment. This month is a good time to be a shorter, July was a good time to go long. But yes, there's always volatility, yes, you can always see it before it happens and wait for it to happen, yes this is common. Every day it happens. Some people have gotten rich off $SPU this past week. I am up about 20% on the day. OPTT, TRCH. All several day fun-runs. It's not super hard, just watch and observe. Watch the top gainers (in a real screener that doesn't filter out companies <$5, like finviz.com) and watch them happen. I personally have never paid or subscribed to Tim's alerts or website or anything like that, I follow him on Twitter because sometimes he does mention helpful advice, but rarely. You can do what he does/did without paying anyone a dime if you care enough.

eGremlin
eGremlin

@CouchChiller
(OPTT, TRCH - not things that blew up today, just really, really giving plays that repeated themselves for days on end). This week $SPU has been that gift (it was in July as well), and I think we will see a breakout to $18 - 19 (could go way past that) before a shorter's delight.

Supergrass
Supergrass

@CouchChiller
@eGremlin
Thanks for the solid insight user. I'm not able to afford both Tim's DVD's so I've been trying to piece-meal information from other anons and from the Tim's themselves to understand their trading strategy.

So far, I've been using Robinhood to buy and Suretrader to short with their strategy... or it least what I think their strategy is...

I was just immediately skeptical, especially since Tim Sykes advertises his services like a cheap carnival infomercial. >_>

Crazy_Nice
Crazy_Nice

@5mileys
Happens, but as long as you aren't using an overly large percentage of your capital on one trade, it shouldn't sink you.
I have two short positions currently, one in the $20 range, one in the $10 range. If the LNKD situation you describe were to strike, I would lose close to $10K on one, close to $5K on the other.
"Huge loss" is obviously subjective, but I wouldn't term these losses catastrophic.

King_Martha
King_Martha

@Supergrass
Yeah, because it works. He genuinely thinks that he can educate more people with this tactic. He still trades very well, he just does it with small accounts for educating. It's a weird situation because everything screams scammer and, while he kinda is, he's also pretty good at what he does. Just watch these plays happen. There is no excuse, we have tradingview.com now. They give a free fucking trial. It's FREE.

viagrandad
viagrandad

@Crazy_Nice
Isn't such an amount catastrophic for 99% of Veeky Forums?

Inmate
Inmate

@viagrandad
as long as you aren't using an overly large percentage of your capital on one trade
It would only be catastrophic if it was your whole pile, which is idiocy to stake on one trade.

lostmypassword
lostmypassword

@King_Martha
Nice, I'm checking that site out now. Btw, do you know of any resources that gives more info on this general strategy that the Tim's and other successful penny stock traders use?

Poker_Star
Poker_Star

@Inmate
I agree with you. I was just asking about the average Veeky Forums user

Sharpcharm
Sharpcharm

@Poker_Star
Well, if the average Veeky Forums user is using $15K, they should have positions maybe a tenth that size, then it's a $1,500 hit, which wouldn't kill them.
But you're right, a lot of them would probably have it all in one position anyway.

Evilember
Evilember

@Supergrass
Tims videos can be found on tpb. Even watching the basic pennystocking video has taught me how horrible people in this board are at stocks

Rh is literally a death trap

Just use a vpn when downloading

Firespawn
Firespawn

@Skullbone

Follow the market and do your homework on the company.

I invested in a sugar producing company stock. They come out with numbers every quarter. So you follow the sugar prices during the quarter, and if they fall it is more likely that the company will make less profit, resulting in people wanting to pay less for the stock. So the sugar price gives a hint about how well this company will do coming quarter. So it makes sense to sell stock if the sugar price is going down for a month or two. That way you beat the masses that just look into the quarter numbers.

However this is not possible for every stock. But doing your homework at least improves your chances of seeing a right time to sell.

PurpleCharger
PurpleCharger

@Supergrass
Tim Sykes
he makes money from selling dvds

TA is a meme

JunkTop
JunkTop

@RavySnake
Because its safer than going long in a recession retard.

GoogleCat
GoogleCat

@Skullbone
3 words
VOLATILITY MOTHER FUCKER

Booteefool
Booteefool

picking tops and bottoms is nearly impossible.

So short a stock trending down, because there is a good chance that it will continue down, and picking the very bottom is impossible.

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