• PLUG could be a potential long, this thing is htfing on the 60min, cant get below the 10day, look at how it’s surfing the 10day, perfect, I think this thing wants to go higher. PLUG bought some breaking out. If I get stopped out what do I do to get back in? I look for a setup. Like PLUG this morning, I bought orhs 69 or so, then it took out orls I got stopped out, then I just rebought it, I actually anticipated the new orhs so I rebought it, the setup is still valid, it stopped me out and look at where it bounced, right on the 10/20ema on the 60min, held the uptrend, so the setup is still valid.
• BTC is down, this is not good, so BTC did bounce off the 50day but now the 10day is acting as resistance, so it’s range bound, needs to resolve either way, probably needs more time. It’s just sideways, it’s building a flag, it’s right between the 10/50day kinda oscillating back and forth, bounced above the 50day, built a wick, got rejected at the declining 10day, created a wick, and it’s just tight sideways. I think later this week or next week I think there’s a good chance we’re gonna have great opportunities in this GBTC, I want this thing to bounce off the 50day I wanna rebuy it. I caught a big move in this GBTC, went up 320% from where I initially bought it, early Oct2020, it was a bigger move than BTC itself, BTC had less than a 300% move during the same time.
• I don’t understand most of the things I trade, I just follow supply and demand. There’s so many stupid things going on in the stock market all the time, it’s all about supply and demand, and our job is to trade that supply and demand, that’s it.
• GME a growing company? Come on, this is the rev growth, they were profitable once in a time, look at the eps this is the opposite of the kind of stock you want to own, so they had a nice profit, then that profit vanished and now they’re losing money. Look at the revenue, double digit revenue losses per quarter, that’s insane, that’s a dying business. There were a lot of hedge funds shorting this thing bc they thought it was a guaranteed bankruptcy. But guys this is not a fundamental move, it’s a supply and demand move. It’s a short squeeze, like down here 98% of the float was short, classic short squeeze. The thing is the setups are the same, it doesn’t matter who’s buying it, if it’s wsb crowd or some mutual fund, for us as traders it doesn’t matter, it’s the same setups.
• BB already fading the gap.
• GME building hls intraday but we’ll see how long it lasts, looks like it may want to fade at vwap. Okay looks like GME may have failed at vwap again. This GME is getting really tight intraday, looks like it’s building lhs, built two lhs intraday now. GME f*ck yeah, lets go to 0 now, remember these things can go down as fast as they went up. It was all a short squeeze, this is what I said before this started, I’m gonna be interested in shorting GME when all the amateur shorts are out, now they’re out and this is where our edge comes in. It’s a very specific setup, and you usually get these high priced liquid ones maybe 6-12 a year that are pretty much perfect, obv 2020 you had more, but maybe half a dozen average.
• Oh wow now it’s squeezing, is there news there or is it just someone buying 1.5M shares with a market order? Now it’s halted. GME opened down from the halt, that’s a sign of weakness, we’ll see it’s too early to say. If this chamath guy can’t get this GME going with all the hoards of people following that guy, I’m gonna add to my short, bc that’s the stock trying to tell you something, maybe later if it fails at vwap and looks like it’s gonna break a range lower. Anytime you add on a short like this , you also make sure you tighten your stop, what I do is put a separate stop for every add. So GME I have two diff stop levels, if I was to add I’d make sure the add has an even lower stop than the other two. Okay so it’s holding vwap for now.
• And also always cover into weakness, you use trailing stops on the long side bc you don’t know if the stock is gonna go up 10% or 100%, but on a short you always know your target, you can’t make more than 100%, realistically you’re rarely ever gonna make more than 50/60% when you’re shorting, so your target should always be like the 10/20day and then you just look at the percentage move, like how much room does it have. GME rn 48% move to the 10day, so anytime the stock goes down 10% from where it is, you know that if I’m gonna use a 40/50% downside target, you gotta cover some, bc a 10% move that’s 20/25% of your expected move, so it’s always nice to cover maybe 20/25%, to lock it up just so you can withstand the volatility. Like something like GME just ripped 15% in one candle, that’s a pretty decent move, so it’s all about putting yourself in a position of strength and not be a victim of the market, not be a victim of random moves.
• GME they should do an offering here, they could cash in big, easily sell 500M worth of shares, save the company for a few more years, they really should. It would be criminal if they didn’t do an offering up here, 8/1/2021 they did a 100M offering? Yeah they should do another up here, the stock is 400% higher now, they could do another couple hundred million easily. They could turn the business around, they could maybe venture into new areas and save the company.
• Never ever short on day one, you’re gonna save yourself a lot of headache if you have just one rule on shorting parabolic moves, one there needs to be a parabolic okay, never ever short day one, never ever, you’re gonna save yourself so much money and so much headache. I don’t care if you’re daytrader, swingtrader, don’t short on day one, wait for those perfect opportunities, that’s where your edge comes in. It’s all about learning from your mistakes, and learning the right lessons, it took me such a long time to learn that day one rule, and yes you have a lot of these stocks that gap up a lot and then they fade on day one, but it’s still day one is so hard to trade, very rarely I trade on day one, it’s best to just never do it.
• BNGO I shorted orls, when it started building lhs, easier to see on the 1min, well it was a little bit lower than orls. But look at the setup, first it had a leg higher, made an 1100% move, but it started from a very low price so 1100% is not necessarily a big move for a very low price stock, then it went sideways had another leg higher, so it had two legs higher, then it had another leg higher, so this is the third leg, third day of the third leg. Not necessarily gonna work, could squeeze to 20, but the r/r is very very good. It’s all about finding these scenarios where the stock just kept going and going and going and then wait for those potential momo shift periods, it’s all about finding these scenarios where your winrate is gonna be 70/80%. That’s the thing, on stuff like EPs and breakouts my winrate is maybe 25/30%, but on something like these parabolic setups, my winrate is way way higher, well over 50%.
• Vwap works so well, idk why, it’s a magic line all I can say, I honestly don’t know how it works. Obviously all indicators you gotta trade the right stock, if you trade some random pos that doesn’t move then obviously nothing is gonna work, but if you trade the right stocks, these indicators work really really well. Bc they’re a visualisation of supply and demand, that’s what it is.
• OSTK man I sold it yesterday, and now it’s going.
• SBE is the largest EV charging station network in the world, I did know that. Since all these spacs are going, bought some SBE, don’t wanna miss the action. I like how it bounced off the 50day, that’s a really nice sign of strength.
• TLRY yeah I’m kicking myself over here, it’s breaking out of a nice flag, a htf on the 60min.
• ENG yeah it’s little htf.
• PLL from the rangebreak, man it’s a double now, look at how beautiful this flag break was on the weekly, hls and then you had this range break, beautiful. It’s the same pattern over and over again.
• FCEL is up over 100% since I bought it, I sold it in the low 12s I think, I bought it in like 8.20s, all I had to do was trail it with the 20day, that’s all I had to do, any time I attempt to play rocket scientist I lose. FCEL now it’s a bit choppy, this candle yesterday is kind of distorting the chart, but if you like disregard the candle yesterday, I mean look at this htf.
• The watchlist on the left, these are like notable breakouts, breakdowns and EPs, pretty much stuff I wanna track, I put them in a watchlist and go back, this is how you build your trading skill, track these good setups, everything that looks remotely good you put them in a watchlist and look back a month later.
• JAGX had an ep [23/12/2020] you could say it worked out, you could make that argument, it was close to stopping you out but it never really triggered the lows of the ep day, look at the volume, 655M shares are you kidding me, that’s an ep, I don’t know what the news was, just a random pump probably.
• EH just got stopped out of a starter, learn from my mistakes, it’s still kinda surfing the 10day, pulled back never even touched the 10day that’s a sign of strength.
• FUTU I’m kicking myself for not trading it yesterday, actually it was day 1, but it really worked holy sh*t. So what you look for in a setup like this, let’s say it wasn’t day one, say it was day 2, you wait until the stock keeps going straight up, you wait for that first red 5min candle, and then you wait for the lows of that candle to get taken out. Here was a red candle [09:45am] but the lows of this candle were never taken out, here it had a red candle [10:25am] and the lows were taken out, you had a set r/r setup. And then it also failed vwap, tried to reclaim vwap and failed, undercut tried to reclaim and failed that’s also another set r/r setup. Those are the intraday patterns you wanna look for on these parabolic types of setups. There’s a lot of nuances obviously, it’s gonna take years and years to figure it out, but just keep in mind you need to have setups, you can’t do things randomly, and just by waiting for things to get really crazy over stretched, that’s where your edge is gonna come in, and you don’t need to work too hard with getting the perfect entries, most of the things are gonna be sold automatically just by waiting for a really good setup on the day.
• If you wait for backside it’s much easier, it’s the same ranges, you look for bear flags pretty much, let’s look at some examples. LAZR, you didn’t have to try to find the top, all you have to do is look for these ranges, lhs, rangebreak, another rangebreak, but this one gapped down so it wasn’t that easy. Also GME, perfect bearflag on the intraday chart, one I traded yesterday, perfect perfect bearflag, so it’s below vwap, tried to reclaim vwap failed, built lhs, then you have a rangebreak, boom set r/r. And here too I should have added more, I should have got short on the 5min red candle break up here low 130s, it’s a set r/r, but obviously this one would have had a wide stop that’s what’s tricky about these.
• Shorting is so hard, like fundamental shorting or like long term shorting is really hard, that’s why I pretty much only trade these parabolic setups. EPs and breakouts those I wanna be in as long as possible, like weeks and months and even quarters, even though my patience usually runs out. But these parabolic setups, those are usually like 3-10days type of trades, I’m rarely in something longer, one bc it’s usually expensive to borrow these, and two they usually hit my targets by then. And like holding it a little bit longer, like LAZR went down 50% in 5/6 sessions, let’s say it had gone down a little bit more, say to $18 that would have been a 60% move, but mathematically it’s very hard to get bigger than 40/50% moves shorting these parabolics usually, yes if you can short them for months and months but the borrow fees are gonna eat up your profits, you wanna be in them as short as possible.
• BYND damn I missed, was a day two move, was the second leg higher, this is a big move 65% in 3 days, actually on a midcap stock that’s a pretty large move. It took out orls, straight down since, it tried to reclaim vwap here [09:51am] but it failed, and yeah could fade back to 160 by tomos.

Misc:

• Happy Bday Kris.

#masterclass #shorting