Short-Only Strategy App (with Explanations)

This app guides you through finding and executing a short trade. It is designed for complete beginners. Each section has an explanation box so you understand not just what to do, but why.

Step 1. Find Candidates

Use one of these Finviz screener presets (each combination shows a different style of short candidate):

Explanation: Instead of looking at one screener, try several. Each preset is a “lens” on the market. Beginners can simply pick one list. More advanced students can compare all three and look for overlap (the same stock appearing in multiple lists is a stronger candidate).

Step 1A. More Ways to Find Candidates

Here are several ready-made Finviz scans and when to use them. Open, skim the list, then drill into the charts + news.

  1. Parabolic Volume Spike — great for exhaustion moves that often mean-revert.

    Open: Unusual Volume + RelVol ≥2 + High Short Float

    Why: abnormal volume pushes price far from equilibrium; if news is weak, supply quickly overwhelms demand and price pulls back.

  2. New‑High Exhaustion — fresh highs on stretched names can fail the next day.

    Open: New High + Liquid + RelVol ≥1.5 + High Short Float

    Why: breakout chasers provide liquidity for shorts near prior highs; if momentum fades intraday, failed breakout → fade.

  3. Downtrend Rally Failure — short bounces below moving averages.

    Open: Price below 50‑DMA & 200‑DMA + RelVol ≥1.2

    Why: primary trend is down; counter‑trend rallies often stall at resistance (MAs / prior lows turned resistance).

  4. Sector Laggard (Biotech example) — find weak names in a volatile sector.

    Open: Biotechnology + Below 50‑DMA + RelVol ≥1.3

    Why: when the sector is soft, the weakest constituents often underperform on bounces → better short entries.

  5. Overbought + High Short Float (baseline) — your everyday starter scan.

    Open: Overbought + Liquid + High Short Float

    Why: stretched readings (e.g., RSI>70) + heavy short interest create fertile ground for quick fades (but watch out for squeezes!).

Step 2. Risk Calculator

Goal: keep losses small and consistent. With a $100,000 class account and 1% risk, your maximum dollar risk per trade is $1,000. For shorts, the stop is above your entry because you lose money if price rises.

  1. Pick an entry near resistance (where price failed before).
  2. Place a stop just above that resistance (invalidates the idea if broken).
  3. Calculator sets shares so (Stop − Entry) × Shares ≤ $1,000.


How it works: MaxRisk = 100,000 × 1% = 1,000. Risk/Share = Stop − Entry. Shares = ⌊1,000 ÷ (Stop − Entry)⌋. Notional = Entry × Shares.

Step 3. Trade Checklist

Review this quick list before trading:

Explanation: The checklist ensures discipline. If any box fails, skip the trade.

Step 4. Track Your Trade

After placing a trade in the MarketWatch game, write it down: entry price, stop, and reason. At the end of the week, review wins and losses.

Explanation: Tracking builds discipline and helps you see what works. The goal is a repeatable process, not one lucky trade.