StockFetcher Forums · Filter Exchange · Filters for Shorts: A challenge<< >>Post Follow-up
jim_c_hill
61 posts
msg #27370
Ignore jim_c_hill
7/15/2003 12:07:39 PM

I have developed several filters for weekly trading that do reasonably well on the buy side and previously posted on this. I then have turned my attention to the short side of the market. The ultimate goal is to trade simultaneously both long and short to have a hedged portfolio

I am finding developing a good short filter more challenging that developing a long filter. Bull markets tend to rise at a lower slope of advance whereas short moves often are quick and of the plunging type. Thus, if one uses low values on indicators to indicate a short, the major part of the fall may be over and the stock quickly rebounds for several weeks. Picking a top to short is just about impossible. Furthermore, if the market is moving upward, even in a down market, the shorts seem to rise with the market.

After many hours of experimenting, I find the following has some promise. As with any filter it is not perfect and one would have to monitor carefully. I think money management in a short position is even more important than in a long position. I will continue to experiment, but here is one possibility for shorting the market in a weekly fashion (note: I look for stocks in the 5 to 25 range]:

Fetch[weekly Stochastic %D crossed below 50 and price is between 5 and 25 and average volume is above 50000 and weekly rsi(6) crossed below 50]

This filter is reasonably good for one week but the nature of shorts, and their rebounding ability, makes its use for longer time periods more questionable. Also, if one does not have a profit after two days I would be tempted to bail out.

If you have comments or suggestions please let me know.


jim_c_hill
61 posts
msg #27371
Ignore jim_c_hill
7/15/2003 12:08:41 PM

Should be Fetcher rather than Fetch

Fetcher[weekly Stochastic %D crossed below 50 and price is between 5 and 25 and average volume is above 50000 and weekly rsi(6) crossed below 50]





wallman
299 posts
msg #27378
Ignore wallman
7/15/2003 3:51:34 PM

HI JIM, all of your points are well taken,finding short filters and the actual shorting of stocks can be very challenging and risky to say the least,get caught in a "short squeeze" and you can be in real trouble,when you play a stock long the most you can lose is your initial investment if the stock drops to zero,but with a short if one is tempted to meet the margin calls in an effort to get even,the amount you lose can be tremendous,as the stock can keep rising to who knows where,i wonder if you have ever explored the idea of shorting ETF's and HOLDERS within your price range,with them at least you get some kind of warning as to when to bail before getting hurt, good luck,MUDDY


risjr
121 posts
msg #27379
Ignore risjr
7/15/2003 6:07:12 PM

i agree

You would figure with all of the stocks that go down on any particular day, you could find several!!

I'm experimenting too, with weekly filters! Unless someone has some good daily filters. I'll try and post some over the next few days

Thanks in advance

Ron


holygrail
72 posts
msg #27471
Ignore holygrail
7/20/2003 2:41:10 PM

FOR THE RECORD THIS IS NOT HOLY GRAIL. THIS IS HIS TRADING BUDDY.

You want a good SHORT FILTER...

Fetcher[SHOW STOCKS WHERE RSI(2) ABOVE 99 and close above 10.00 and avg vol(10) above 1,000,000 and volume above 1,000,000]






holygrail
72 posts
msg #27472
Ignore holygrail
7/20/2003 2:46:22 PM

FOR THE RECORD THIS IS NOT HOLYGRAIL. THIS IS HIS TRADING BUDDY.

EVEN BETTER and SAFER...

Fetcher[SHOW STOCKS WHERE RSI(2) ABOVE 99 and close above 10.00 and avg vol(10) above 500,000 and volume above 500,000 and 60 day slope of the lri(60) is above 0 and HIGH near TOP linear Regression Line(60)]




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