When the general broad market is actually very bullish, it generally, from my experience, it doesn’t make sense to try to look for short trades.
Especially if you are a swing trader or even position trader. The longer time frame you go, the worse it gets if you try to look for a short trade in a generally very bullish broad market.
The reason is this. In a general broad bull market, most of the stocks will be looking to go higher. Okay?
Even those really fundamentally poor stocks will tend to be able to hold their support quite well. If they are not rushing to go higher, they will usually tend to hold their support right as well.
So any kind of breakdowns, even in the very fundamentally bad stocks, the chances is that you will not be able to maximize your profit so easily.
So my suggestion generally is if the broad market is very very bullish, just focus on stocks to long rather than try to look for any stocks to short.
The only time where you can consider looking for stocks to short, in my personal opinion, is when the market is showing uncertainty, showing signs of turning around, broad market wise. Okay?
Showing signs of turning around, or where the broad market is clearly in a bearish tone. That’s when you actually look for stocks to short, because that’s when you have the highest chance of being right in the first place, and secondly, having that short trade running very quickly.
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