A lot of traders think I hate it because I rip on stubborn short sellers so much.
But it can be a viable strategy if it’s done correctly.
Heck, I started out as a short-biased trader.
I was shorting penny stocks before people even knew you could do that.
But as word got out you could short these trashy companies that don’t have real products or any income — the strategy got overcrowded.
And once shorts wanted to cover their positions, it started creating these massive short squeezes.
So I adapted and started going long.
But shorting still has its place in the market…
I just don’t think you should short low floats having their first green day on high volume with a news catalyst.
Instead, look for this…
Want to Try Short Selling?
There are about 16,000+ publicly traded stocks on the market. And there are probably just as many trading strategies.
You just have to find what works for you the best. Plenty of traders can go long and short…
But no matter which direction you want to trade, there’s one thing to look for that can increase the odds of a stock making big moves in either direction…
News.
Good or bad news moves stocks.
And you have to trade the trend, not bet against it…
Just like good news can send a low-float stock ripping higher, bad news can pull the rug out from under any support level and send a stock lower.
That’s what we’ve recently had in the Breaking News Chat…
Yesterday the team announced that DraftKings Inc. (NASDAQ: DKNG) was hacked. And hackers changed users’ account information and drained their accounts.
When the news hit, the stock tanked. And traders had the opportunity to catch a 9% gain…
The stock was trading at $14.75 when the alert went out. And the stock made a low of $13.37.
One of our resident short sellers in the SteadyTrade Team even caught a piece of the move…
Last week, the Breaking News Chat team alerted subscribers to a short report from Muddy Waters Research on DLocal Limited (NASDAQ: DLO).
After the news dropped, the stock fell 41%!
This is a good market to develop your skills and test new strategies with a small size.
But if you want to stick with going long, the Breaking News Chat also had three winning alerts that gave traders the chance to catch combined gains of 255% in upside moves!
It doesn’t matter whether you go long or short — if you trade the right stocks with the potential to make big moves. And that means stocks with catalysts…
The Breaking News Chat team alerts to all the most important headlines. Try it for yourself here.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade