A trader explains a three-step short-selling method: find a support level where price is consolidating, wait for a break below with a volume spike, then enter a short when price retests and gets rejected. He targets the next lower support level with a tight stop above the retest candle.
I spent thousands of hours backtesting market data trying to find one strategy that I could use forever that will be my holy grail. And it's so simple that I'm going to teach it to you all in the next 60 seconds. Step 1, I like finding a support level with price consolidating directly above it. I like marking the high of this range and the low of the range. And then step 2 is I like to wait for price to break below the low, and I am observing the order flow. I'm checking volume. A spike at that exact moment means that real sellers just entered the market, and I'm observing if the move is real and genuine by if the market is gonna have continuation down. Step 3 is I now wait for price to come back up into this support level, and when it does, I'm looking for a sharp rejection back down. Sellers are defending their position, and the rejection shows that sellers are not done. They're defending price for more downside. This right here is my entry, and my stop sits just above the retest candle high, so it's very tight, meaning I get a small risk and a very high reward trading setup, and my overall target is the nearest support level below.
