A trader explains his short-selling system: moving averages smooth price trends across a daily chart for context and a 5-minute chart for entries. He only shorts when price is below the averages on both timeframes, and watches market gaps and close-to-open relationships to predict the next move.
So let's just say that this is the price. Then what I've got running through it are like my moving averages, but mainly because I don't really use them for indicators, I just use them to smooth out the trend. So if something on my two timeframes, which are my daily and 5-minute, if something's moving below the moving averages, I'm only shorting. So daily is your bigger picture? That's my anchor chart. Yeah. And the 5-minute is where I trade. Why I do that, I use the gaps. If the stock market closes at a significant low or something like that, I don't want all that muddled up data that comes in, everything in between. I want to know where the market took it at the close and where the market's going to bring it They open.
