GREY:XEBEQ - Post by User
Post by
ZouZS3on Mar 18, 2022 6:23pm
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Post# 34526932
Targets and Shorts
Targets and Shorts
Firstly, studies have found that, historically, the overall accuracy rate is around 30% for price targets with 12-18 month horizons. Second, many traders choose to sell short at new highs, thinking a security has risen too far, but this is a recipe for disaster because uptrends can persist longer than predicted. Modernalgorithmsoften push the price above a broken level to squeeze shorts and draw in weak-handed buyers, before resuming a downtrend. Your first job as a short seller is to avoid the crowd at all times while using their emotional energy to get positioned at the best possible price.Countertrendbounces offer ideal conditions for selling short because you know the price where other sellers are likely to reload positions.The risk comes if that crowd is bigger than the crowd buying the broken security, hoping for a new uptrend.Traders love to sell securities with colorful and questionable stories that dominate the financial press and media, thinking theyve uncovered an instant moneymaker, but these issues attract a massive crowd. In turn, the security incurs high short interest, significantly raising the odds for vertical squeezes even in virulent downtrends