Shorting Strategy?

[Mightymorphinchris]

I've been trying to figure out a highly profitable short strategy with obviously little success. I can get roughly 65-75% on back testing when doing the opposite of what I would do for a long strategy.

I'm curious, what are others looking for in terms of indicators when entering a short position and what kind of success are you having with that strategy?

 

[rad14733]

@Mightymorphinchris Your logic shouldn't vary whether playing long or short, only direction... The main rule is to only trade the trend, unless you are a very seasoned trader... And if there is any question whether the trade is there or not, it's not... Better to let a trade pass you by than to jump into a losing trade... Another trade will come along... I don't trade any differently regardless of direction as the rules are the same, just reversed... Shorting, or trading Puts, can be a mental block because it goes contra to what we normally think... Beat that hurdle and you've got it made...

 

[s1111]

@Mightymorphinchris Try this, Play with the settings to see your risk tolerance. Adjust accordingly

input action = {Default "Long","Short"};
input entry_price = 2.75;
input sl_percent =0.3;
input rr_ratio = 2;
input position_size = 2000;
input offset = 5;
def shares = position_size / entry_price;
plot stop;
switch (action) {
case Long:
stop = if isnan(close[5]) then round((position_size - (sl_percent * position_size / 100)) / shares)
else double.nan;
Case Short:
stop = if isnan(close[5]) then round((position_size + (sl_percent * position_size / 100)) / shares)
else double.nan;}

plot entry = if isnan(close[5]) then entry_price else double.nan;
plot t1 = if isnan(close[5]) then entry_price + rr_ratio * (entry_price - stop) else double.nan;
plot t2 = if isnan(close[5]) then entry_price + (2 * rr_ratio) * (entry_price - stop) else double.nan;
plot t3 = if isnan(close[5]) then entry_price + (3 * rr_ratio) * (entry_price - stop) else double.nan;
AddCloud(entry_price, stop, Color.GRAY, Color.GRAY);
AddCloud(t1, t2, Color.GREEN, Color.GREEN);
AddCloud(t2, t3, Color.LIGHT_GREEN, Color.LIGHT_GREEN);

AddChartBubble(IsNaN(close[5]) and !IsNaN(close[6]), entry_price, entry_price, Color.Light_Gray);
AddChartBubble(IsNaN(close[5]) and !IsNaN(close[6]), t1, "T1 $" + t1, Color.GREEN);
AddChartBubble(IsNaN(close[5]) and !IsNaN(close[6]), t2, "T2 $" + t2, Color.GREEN);
AddChartBubble(IsNaN(close[5]) and !IsNaN(close[6]), t3, "T3 $" + t3, Color.GREEN);
AddChartBubble(IsNaN(close[5]) and !IsNaN(close[6]), stop, "STOP $" + stop, Color.RED, no);

 

[Mightymorphinchris]

@Mightymorphinchris Try this, Play with the settings to see your risk tolerance. Adjust accordingly

input action = {Default "Long","Short"};
input entry_price = 2.75;
input sl_percent =0.3;
input rr_ratio = 2;
input position_size = 2000;
input offset = 5;
def shares = position_size / entry_price;
plot stop;
switch (action) {
case Long:
stop = if isnan(close[5]) then round((position_size - (sl_percent * position_size / 100)) / shares)
else double.nan;
Case Short:
stop = if isnan(close[5]) then round((position_size + (sl_percent * position_size / 100)) / shares)
else double.nan;}

plot entry = if isnan(close[5]) then entry_price else double.nan;
plot t1 = if isnan(close[5]) then entry_price + rr_ratio * (entry_price - stop) else double.nan;
plot t2 = if isnan(close[5]) then entry_price + (2 * rr_ratio) * (entry_price - stop) else double.nan;
plot t3 = if isnan(close[5]) then entry_price + (3 * rr_ratio) * (entry_price - stop) else double.nan;
AddCloud(entry_price, stop, Color.GRAY, Color.GRAY);
AddCloud(t1, t2, Color.GREEN, Color.GREEN);
AddCloud(t2, t3, Color.LIGHT_GREEN, Color.LIGHT_GREEN);

AddChartBubble(IsNaN(close[5]) and !IsNaN(close[6]), entry_price, entry_price, Color.Light_Gray);
AddChartBubble(IsNaN(close[5]) and !IsNaN(close[6]), t1, "T1 $" + t1, Color.GREEN);
AddChartBubble(IsNaN(close[5]) and !IsNaN(close[6]), t2, "T2 $" + t2, Color.GREEN);
AddChartBubble(IsNaN(close[5]) and !IsNaN(close[6]), t3, "T3 $" + t3, Color.GREEN);
AddChartBubble(IsNaN(close[5]) and !IsNaN(close[6]), stop, "STOP $" + stop, Color.RED, no);

Thanks for the reply @s1111. I'm not getting anything showing up on any chart with this code exactly as it is above. Am I missing something?

 

[s1111]

Thanks for the reply @s1111. I'm not getting anything showing up on any chart with this code exactly as it is above. Am I missing something?

You have to manually input price of your stock and choose long/short

 

[s1111]

@Mightymorphinchris use this code as the author wrote a new modded script. The only thing you have to change is your stock price for long or short
Hope this helps
https://usethinkscript.com/threads/thinkorswim-risk-reward-indicator.7210/post-74034