Day Trading a Short Squeeze | Tradingsim Video Lessons

One of the nigh powerful trading setups is the shortish squeeze.  A short-stalked squeeze occurs when you give birth a thronged trade on the short side.  Present's the key with these types of setups.  You require to be able to discombobulate gas on the fire.  What do I mean by this?  Well, having a high short interest ratio is one thing but coupling that with a low float neckcloth can produce explosive moves very quick.  Our job is to first key superb candidates for this type of trade then create a courageous plan and execute it.

You may involve why a altissimo short interest can pencil lead to huge squeezes.  Later every, stocks with high low interest are most likely terrible companies happening their way to failure, right?  Possibly, but we father't care.  The short squeeze is a supply/demand propelling which exploits a intact bunch of traders WHO believe thither is free money shorting this stock.  When you have well characterized areas of strong resistivity in a chart and those levels get broken, you end up having a whole bundle of traders in a losing position.  This triggers stop exit orders to cover the stock.  High abbreviated interest = lots of shares which need to be covered (or bought on the open market).  Well, imagine having a huge number of buyers with non enough shares available to buy.  Buyers finish up having to pay Sellers whatever they want.   Hence, the super number of buyers is the fire and the lack of supply or liquidity is the gasoline existence thrown into the fire.

My explore involves identifying stocks which distressing short-circuit interestingness (typically above 25%) and look for stocks that have low float (~below 100 million shares).  Here is a good situation with this selective information:  http://WWW.highshortinterest.com/.  Next, I will evaluate the chart pattern and look for heavy areas of resistance and good chart setups.  American Samoa you will get wind in the picture below, identifying these levels is 80% of the job.  So, intraday trade execution is the other 20%.

The video you see above was created using our own Tradingsim Market Replay tool.  Feel free to take our gratis 7 day visitation and improve your day trading skills and money management approach.  We have over 2 years worth of data you sack practice against.  We are essentially a trading DVR!

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