(binned per thread starter's request) Market bottom rotation trad

Tracking EURAUD.

Hey nope not using phone TC2000 didnt even know it existed. Check in settings if there is way to load more candles or try to "scoop" chart together with fingers see if that loads more of it.

M will try long from micro shelf. Neat setup, lets see if it works out.

-2R, no momentum, micro shelf failed to hold.

Squeezed well but was too asymmetric supply did not take an entry.

Gap up on pre market trading, backed by positive news and following potential short squeeze. Opening a play oportunity for both long and short side.

Over past pages short squeeze has been somewhat explained for low cap, low float assets with decent short exposure, now taking explanation one step further with using gap on news release as increase to actually participate / spot the squeeze. This means that setup can be played without proper structural price support (dense supply) however any entry should be approached from micro stance on M1 and be properly risk sized. Preffered price tilt before the gap print should be slight and consistent down trend at least for 3 days (to ensure larger chance of previous shorts still being in the order flow).
It might seem like very time consuming thing to find such potential plays, so it is important for trader to have quick and as effective search method as possible to find those plays, the way i do it (perhaps not the best way but it works) is by filtering all equities by % of gain change and checking if there are any equities that are up at least 10% that day on pre-market trading (meaning you do this quick search before the US equity market opens). If there is equity with over 10% pre market trading on up side then what is required next is to seek two next informations to confirm a play:
-short interest (can use free or paid sites for it)
-outstanding total float of shares (many free sites giving that info, or even TC2000 itself)
Each day there are only going to be few assets max that will fit the required creteria, actually in most cases only 1 or less assets per day.

To understand why pre market trading can be important info is to understand how demand and interest for asset is sorted. Many large equities such as Facebook, AMD, Nvidia, McDonallds etc...will trade almost every day on pre market trading becouse there are many people around the world interested in those assets, but low float equities of poor companies will have much less interest, therefore if that asset trades pre market it is usually some good reason for it, like a surprise news release with positive or negative tilt. And since market is not open yet, chances are that news event has not yet been properly priced it along with the fact of potential shorts being squeezed out.

That means that actual assets that will be in interest are only low cap low float equities. An example of that would be ticker with:
-5 milion shares of float
-300% short interest compared to avarage daily traded volume (also can use number of outstanding shares short sold compared to total shares in circulation for example if 70% of all shares in current float are short sold that is significant number, anything above 30% is considered high).

Once trader gets used to search process it will take only 5 minutes a day to preapare for potential play.
For a gap size a 10% should be used as minimum, the more than that the better. For example if equity fits all the requirements and is gaping from 0,80 USD to 1,5 USD then that is decent substential gap. If it is based on surprising positive news then chances are that its not yet priced in fully.
It is very important to not be too quick on pulling trigger, once market starts to trade its important to wait a bit and see if price starts to respond positively overall ,if it doesnt then it has been likely priced in and the buyers will liquidate profits pushing price down.A best way is to have micro play on M1 as your entry guide to have better risk control.

Checking historical daily chart of that asset if it has history of spiking and going quickly back down is also another way to add to an edge on short side, in most cases asset will repeat behaviour on positive news if it has such history.

If all the correct circumstances are applied then chances for that large move up and large move down are likely to happen. This applies to currencies aswell but it requires far deeper understanding of economics, geopolitics, agendas, floats, and history to use it therefore ill keep that one for later stages on the page.

Example on ASTC, outstanding short sold shares, float, news, gap, price response, and after the run eventually coming all the way down which is what happens in 95% cases the question is only where and when. Short burst of positive news does not change a bad long term outlook of a company with bad balance sheet.







MDGS.





To understand why market moves and how strong it moves at specific events or situations is about knowing all components of how markets function and the overall positioning. Generalizing or oversimplifying will not yield consistent results to a trader. For example if a trader thinks that asset just made 100% move becouse the news were quite positive, that is not understanding the real mechanism deep enough, which will yield trader often having a wrong expectations about events. All cogs will have impact on how things move not just a single reason. To use analogy from biology if one says "well most of animals like to over eat food if given a chance becouse they like the food", that would be incorrect statement becouse the reasons are deeper than that. It is because most animals other than human are never sure when theyll get another chance to eat again thus survival mode kicks in to eat and store the fat, its dopamine release in brains that backs the eating of food to ensure animal has will to repeat that behaviour, its because if dopamine isnt stimulated in other stronger events then the food might became the best stimulant, in environments with sparcity of food those animals will tend to overeat a lot more than animals in lush environments.....One can name many factors that each have real impact on why and how that mechanism works, and the same is true for why price moves and how far it moves and how quick it moves.
Understanding all the underlaying attributes is needed to have proper expectation.

To continue previous post:
SNGX






As i said it before, focusing on potential heavy short squeezes should be priority play of every trader, becouse it is the most consistent play that gives strong RR on trade both directions unlike any other play, except perhaps a hiperinflation short play but that one is very rare. Strongest plays are always when market is sitting on completly opposite side of current changed reality, because that will force a liquidation and overall change of positioning thus causing the strongest move. The longer the market doesnt accept the short term reality change, the stronger the move will be, for example if short term reality changes in positive side but shorts keep pushing in but the previous shorts are covering then that will cause a snowball effect pushing price higher and higher as previous shorts start to cover on squeeze. That is why some equities can go from 2 to 5, 5 to 10 , 10 to 30 and before you know it its trading on 50 USD in just a week time being a completly irrationally priced.


CALI





For those who follow thread make sure you do research on your own on many previous historical examples to understand the process. There is logical process to achieve or understand the process behind those moves, but the confidence on trading will only come from studying the past. Would be good to see some potential future watchlist suggestions of potential short squeezes from the participants on thread.
On side note Nasdaq.com was used on examples as news or short interest info site, there are many others though. Some paid solutions can be very good with additional edge but i am not here to promote them so wont be mentioned.

Further example of AMTX:

To put some forward words, this thread is not about explaining the basics of certain processes involved in patterns on this thread. Things like what volatility is, float, supply, demand, liquidation, or any other basic process should be researched and studied by trader from other sources as it would take too long for me to explain with many lessons, but that knowledge has to be obtained first before trader starts to trade any of this patterns. This thread is about putting all the puzzles together that actually make a consistent strategy not about explaining basics that can be obtained on many sources.
At the end nothing in the market happens from random reasons, its can all be explained as long as proper infos and perspective is used on situation. A trader having a strong conviction that everything is random is self admitting to not having a proper needed knowledge to understand mechanics of price moves.

This thread will focus on many different plays, but a plan is to prioritize heavy short squeeze as main pattern (over time, takes more research and study), not because its the simplest play but becouse it is by default the best RR play in the market. Takeout plays are the most frequent, but the quallity play is underlined in heavy short squeeze.

And for last example:
SPEX

AUDUSD

For you lazy guys i compiled a check list of Jan entry rules for bottom rotation. Imo this is the ideal combination of factors, presented in this thread. Jan, please add or correct me if you feel i missed something:

Bottom rotation qualifiers:
1. Symmetric, condensed, clean and fresh supply
2. Parabolic or very slow condensed drop (left side) prior the pattern
3. Enough candles in structure (more than 5 per leg, not too much)
4. Clearout (swift)
5. Strong Higher low
6. Strength of bulls before takeout (heavy volatility/volume change - bigger candles, many quick ticks per candle)
7. Micro shelf (for risk management)

now people gonna ask you
what is symmetric
what is condensed
what is clearout
etc etc etc...

see what we have here
notice strength of bull increasing on the last leg up, then weak correction and again strong up for the takeout

See what we missed here

GU putting up a shelf

I'm buyiing UCHF @956ish and watching GU now

-0.4R and -0.8 R - SL too agressive

That is what qualifies highest quality play yes.