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The Late-Day Fade: Learn to Spot & Trade This Short-Selling Setup - YouTube
Channel: StocksToTrade
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all right today we're going to talk
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about shorting and
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specifically
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i think the best short selling setup and
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that's that late day
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fade and let's talk about imp so first
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of all i want to kind of break it down
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why i think this was a solid afternoon
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fade and then ultimately what we want to
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look for so
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you know right off the bat we look at
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the daily chart okay this is uh recently
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started trading just a couple months ago
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and i mean you can see absolute disaster
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okay okay so let me actually i'm gonna
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get rid of my oracle lines here just
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give you a little better view okay so
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this started trading back in december
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got destroyed day two day three day four
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day five days six day seven day eight
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day nine
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then had like
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a a three cent red day on or green day
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on day ten and then proceeded back and
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then as recently as
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january gapped up got destroyed
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beautiful doji candle on day two which
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we have a doji candle today doji
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hammerstone doji gravestone something to
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look for um anyway
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went straight back to fade big gap up
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today
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back to that fading again today and you
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know listen markets in our favor you
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know the day i'm recording we got more
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um saber rattling i guess you would say
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in russia and ukraine
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you can see the markets getting ready to
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take out the january lows ugly day s p
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500 down over 1.5 today so remember i i
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do this a lot
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i'm checking off those boxes so right
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off the bat you got it you got a brutal
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chart okay uh the stock ran on no news
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yesterday did have a decent gap up today
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but you know you could say got
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overextended especially when you look at
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the daily chart no news as i mentioned
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and then an overall
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short friendly market i mean there's a
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lot of fear out there okay um we look at
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a lot of long setups a lot of buying
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setups when we look at float rotation
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these big low flow runners in hot
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sectors you know that that's a fear and
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greed situation that's that's a
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situation where you know people are
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willing to chase the stock up because
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they're like oh it's a hot sector oh it
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has news oh look at the volume so those
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stocks beget higher moves higher
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ultimately imp had nothing other than it
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was is loosely very sketchy stock
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loosely tied to the petroleum sector
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which i don't even know what these guys
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do again terrible financials terrible
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terrible terrible everything about inp
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is terrible okay so that being said i'm
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gonna drop on v-app and we're gonna talk
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about
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what we look for
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to short this so
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many of you know my love
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of view app i mean vlap is a bullish and
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bearish indicator that we use to
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determine you know where the sentiment
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is and i'm going to zoom in specifically
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on today and then i'm gonna grab jump on
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the whiteboard and show you what we
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would look for to fade this here stock
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so
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we had that continued move today so we
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set a top basically at 125. you know i
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like to fixate on those whole dollar
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half dollars i know 125 isn't a whole
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dollar half dollar but when you're
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talking about these
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you know lower price stocks we do like
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look at the intermarry intermediary
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increments such as quarter dollars etc
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and it's just that key psychological
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level so you can see i'm looking at a
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five minute candle here we had a top let
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me actually let me delete some of these
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lines
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topping here at 125 topping here at 125
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tapping here 125 so you can see that
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resistance has been formed at 125
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tried to break it about 10 30 tried to
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break it about noon couldn't break
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couldn't break
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then we kind of come into that breakdown
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and that v web fail right here at 111
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so
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that gives us that sentiment shift as we
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as we like to look for so once the stock
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can't break can't break can't break we
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now have a place to risk off of so we're
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typically going to risk that hard area
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okay that's our you know our our exit
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point if we take that view app fail
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which keep in mind you can also
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click below for the stocks to trade
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advisory um i often bring up
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the top 10 trading patterns ebook okay
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five long patterns as well as five short
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patterns and if you don't have the ebook
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yet
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please check out the stocks trade
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advisory because
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you get the ebook
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and you get stock straight advisory
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where i'm live every day 8 30 eastern
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you get a monthly report research report
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and a weekly watch list for basically
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the cost of the ebook really i mean to
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me the e-book's worth at least 50 bucks
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stocks the trade advisories 50 bucks you
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get the book you get daily webinars
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week weekly watch list as well as a
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monthly research report uh detailed
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research report where we're looking like
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hot sectors so anyway
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that v wap fail pattern is is the number
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one short selling pattern it was my
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favorite short pattern from 2007 to 2015
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you know when i'm low mentioned or
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recognized the market shift in 2016 and
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then 2020 things went completely crazy
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but anyway so do we look at that entry
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which would be that basically 112 um
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i know it's 11 78 but we'd look to short
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at that 112
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we'd be risking 125 which means we got
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13 cents of risk
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so and we've got a clear you know clear
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risk reward i mean i mean that would be
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a good place to stop out gives you
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enough range i mean you can see the
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stock did bounce did bounce but didn't
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get anywhere near the stop i mean listen
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if you're trading these big movers this
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thing ran like 40 plus today you can't
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have one cent stops okay if you have a
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one cent stop you got two biggest size
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okay i know
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you'll see these guys on twitter you
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know they they
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75 000 entries on their chart they're
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risking you know one cent here or there
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scalping in and out
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it's very very difficult to do as a
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newer trader and it's impossible as a
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part-time trader i mean listen if you're
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trying to scalp for one cent two cent a
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share at work good luck not blowing up
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and not getting fired okay
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probably both you'll probably blow up
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your account and you'll get fired great
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great imagine telling the wife about
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that or the husband about that tonight
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anyway that being said
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you've got a good risk to reward 13
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cents on a one dollar stock
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so if you do get stopped out you know
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it's an acceptable loss it's reasonable
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you got a clear entry to stop out and
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then you're gonna look
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excuse me to cover
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into that three in one risk to reward
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now are you gonna get all the way down
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to 80 cents today
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tough in this bull market but maybe you
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get a washout below a dollar it hits 90
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cents and you just now made 20 cents
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when you're risking 10 ish that's two to
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one risk to reward which in the land of
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short selling penny stocks two to one
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risk to reward is actually pretty good
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um and again i'm sure you can hear my
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enthusiasm you have to have crazy
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discipline you have to cover quickly
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yes the market's ugly today yes we've
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we're on the cusp of world war three but
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still i mean i think still focus on two
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to one wrist reward
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cover the washouts don't get greedy and
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if you've got good good discipline that
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is a consistently repeatable strategy
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risk the high day cover the washes
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have realistic goals don't aim for home
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runs and do not
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do not hold
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o slash n okay uh imp was rough last
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night gaps up at 4am okay
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cover the washes in the late day it's 3
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30 p.m it's consistently repeatable
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don't get greedy that's the biggest
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thing and that might be the number one
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lesson of this video if you are gonna
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look to short penny stocks in 2022
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discipline is always number one but you
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see green you take green okay
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i'm gonna write it in green okay
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see green
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take that green baby
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nail and bale don't hold for 50 cents
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don't hold for a penny and don't hold
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overnight but if you can be disciplined
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set up the chart based on the high day
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trade those v web fails trade those key
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levels all things we look to do on the
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long side it can be a consistently
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repeatable strategy
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all right my friends
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hopefully
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hopefully you're not watching this from
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you know a cave
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on you know on on on a burned out
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cathode ray tube tv because world war
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three happened
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but if you are i appreciate it like
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subscribe and share with your friends
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and we'll see you on the next video
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