“How Do You Short A Parabolic Move”
“How do you short a parabolic move”. Such a popular DM/question year after year. The answer is pretty simple. You dont. There are much easier trades out there. The only time i’d recommend it is if your account is large enough to split up your max size in at least 5-10 lots
See the best way to nail the top on a parabolic with max size, is to realize that you never fucking will. not consistently at least. so the key is to wait for topping signals (confluence of volume, level 2, blow off candles etc) and start small, with room to add higher.
And u cant do that unless ur max size is so large that u can split up the trade into several chunks.
If u try to do that with 1K shares max size or less, ur risk/reward will be horribly skewed. The starters will be so small that if the 1st lot nails the top, ur wins will be tiny
and the few times u are wrong, all ur lots will be filled on the way up.
The result? ur losers will always be on max size, and ur winners will always be on partial size. So it’ll give u a false sense of success until that black swan day eventually comes. 1 loss erasing 10 wins.
Remember, the reason why parabolics end careers, is because they are the HARDEST trades to stop out of. NO ONE who is short max size on a para wants to be the clown who stopped out at the top. so that stubborness makes them hold until pain or margin calls takes them out.
If u stop out at the top, u will HATE urself & say “see, i knew i shouldve waited. fuck risk management”.
Then the next trade, u wont stopout, & that’ll be the trade where the stock just keeps going. Trust me, the market is a cunt like that. So just avoid paras