Making Money Shorting Stocks

Another week has come and gone, and in that time, most of the stocks I have selected produced incremental profits. The stock that was shorted last week, which was the stock that I said I knew nothing about, produced a profit of more than 10% in one week. Many fundamental analysts, especially the CFA type, the type that thinks they are smarter than everyone else, but could never outperform an index if their life depended on it, probably would die for 10% a year.

That being said, one stock I selected, EKO.v, has been a real stinker. That stock was too far away from its 50dma when selected, and I will keep that in mind when selecting stocks in the future.

This is the 14th week of the experiment, and here are the breakdown of the results thus far:



Here is this week's mega trending stock:



As you can see, the 50dma has formed an impenetrable wall that has acted as a bulwark against any bullish price action. Naturally, as per the rules of this strategy, we would place a stop above the 50dma.

In order to maximize profits trading and investing in stocks, I feel that we should take WD Gann's advice, and "be just as willing to sell short as you are to buy." In fact Jesse Livermore, certainly made more money shorting stocks than he ever did going long.

What I try to to do is to go with the flow. If the trend is down, then short, and if the trend is up, then buy. Here is what Mr. Livermore had to say about this principle:

"I was short one hundred and fifty thousand shares of
stock, not because I knew the news was coming, but because I was
going along the line of least resistance."

By trading with the trend, we are going along the line of least resistance. Thanks for visiting.

Let the Charts Show You the Fundamentals

Over the last week, the stocks selected for this strategy did quite well. Slow and steady profits seem to be accruing each week. The profits are not out of this world, but, then again, this strategy is not about getting rich quick. Here is a breakdown of how we are doing so far:



Here is this week's mega trending stock:




This company is called Ryland Group, Inc. I have no idea where this company is located, or how their financial statements look like, or what product or service they provide, but I do know that, by looking at its chart, that this company must be in bad shape.

Thousands of other investors have likely looked at every detail of this company, and have "voted" with their money as to the future outlook of the stock. By looking at the chart, I can see the result of this voting, which is why I need not look at any details of the company myself. The market has done this for me. This one of the basic tenants of technical analysis. Thanks for visiting this site.

Trading with The Trend Example 12

During the last week, nothing out of the ordinary happened on the markets. This means that this strategy performed as expected, which means that most stocks experienced slow but steady gains last week. This is what trending stocks tend to do.


Here is this week's mega trending stock:


This stock is currently right on the 50 day moving average (dma). This means that it must continue falling next week in order to avoid getting stopped out. This in turn means that this is a low risk, and potentially low reward play.

The Hidden Advantage of Canadian Stocks

Another week has passed, and that means another post to this blog. Out of the 6 stocks in play, 5 produced gains last week. The one stock that did not produce gains was the stock selected last week, and, as the following table shows, it did quite poorly:











Keep in mind that this blog is really just an experiment. I'll keep posting these stocks, as scientifically as possible, for at least a year, and at the end of this time, we will see what the results are. If you want to experiment with any stock trading ideas of your own, then I would recommend signing up for a free practice stock trading account with virtual money.

Although this blog really just is an experiment, I do, nevertheless, sometimes put money into these stocks. If you are curious, you can see what positions I am holding by having a look at my trading journal.

Here is this weeks trading with the trend stock:
















One thing that my table at the top of this post does not take into account is currency fluctuations. While the stock above trades in the United States, I also have many Canadian stocks in the table.

If you are American, and judging by my stats, you probably are, then many of the stocks I have posted should be of extra interest to you. This is because if you invest in the Canadian stocks I have posted, you have the potential to make money in two different ways. Firstly, of course, by the stock's appreciation, and, secondly, by the fact that the US Dollar is in a bear market.

For example, if you had invested in Canadian stock XYZ in 2001, and it increased in value by, say, 30%, then you would actually be sitting on a 65% gain, since the US Dollar has lost 35% of its value since 2001.

Also, please do not take offense by the fact that I am shorting American stocks and going long on Canadian stocks. This has nothing to do with politics or anything of that nature. I am only trying to make money!

Thanks for visiting.