Shorting is profitable but highly risky & nerve wrecking game!
Often timing of shorting blows in our face!
Like shorting bank nifty as on last week!
So, what is the best and the safest point to short a stock or index futures?
The answer lies in the nature!
When do volcanoes erupt?
When do Earthquakes come?
When does an Avalanche start?
When does a cloud burst?
When does the pendulum reverse?
When does the tide turn?
When does a war break out?
....
All of these happen when two conditions are satisfied
1. Excess over a limit
2. A trigger to start it all
Excess of everything is bad, including a rally.
Every rally extends into the "excess" zone.
Smart money sets the ball in motion.
Dumb money follows in heaps and herds and doesn't know when to stop.
Smart money enters on logic. Dumb money keeps coming on frenzy!
Sentiments take over and they don't know when to stop!
After all, the late enterants also want to make money.
The people who buy from the late comers want to make money too!
This chain reaction (called distribution) reaches too far till everyone left feels like a fool except the part of smart money which is still their in some corner!
The funny part is that nobody is willing to admit the folly even now.
They close their eyes to the deep fall below and hope against the hope!
They all wait for the frist one to fall!
Even then they keep living in the fools paradise, ignore the first signs and buy some more!
Heights!!!
This causes the lower high on the graph!
That is the time the Avalanche starts to gather momentum!
That is the time to go short!
Stampede is about to start!!!
Everything will start falling under its own weight!
Everything will crumble down like a pack of cards!!
Latest examples of this
Sugar & Metal stocks' mad bull run followed by the crash
So, if yours is the smart money, don't worry about the crash amidst the rally
keep riding
till the two conditions are met
- excess over the limit
- the trigger punctuated by a lower high.
Till then, let the ridiculous distribution game continue
Let the excess happen!
As someone said "A pin is waiting for every inflated balloon!"
2 comments:
24 days, 48 posts, 2 post a day
what are u doing veer ji, u r really going at a great speed.
As someone said "A pin is waiting for every inflated balloon!"
It seems that someone is jagmohan singh only
regards
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