 How everybody, it is Swing Jam with X-Trades and today I'm going over a shorting strategy. So this strategy is going to be mainly used in the market conditions aligned. So we see a lot of stocks making new relative lows. So for example, if you look at this chart here by All-Star charts, we could see that you know, relative new lows compared to Nasdaq new highs is very, very high. But this is basically telling me as a trader is as while the major indexes are up a lot of the small or medium cap stocks are making new lows. So when we see something like this where IWM is sort of lagging the past three days, we see spy pretty much flatter, you know, QQQ actually rallying. This is when you're going to kind of want to implement this type of strategy. And what you're mainly looking for stocks are basically one sideways and start a range expansion. So a range expansion is pretty much a breakdown to the downside with increased volume. So a lot of these setups, we're seeing the same thing, you know, breaks the downside, increased volume. All these stocks are going to have very similar setups. The key pattern here is that we see the 8SMA acting as resistance. We get continued follow through. So the way you're going to enter this setup is two ways. You can enter on the breakout of the support line. So let's say right here on the breakdown is 66.75 or you can enter on the, you know, near the close at 63.15 or in the last 15 minutes of the session. And what you're mainly looking for is, you know, one to four days of continuation, ideally a gap down and go towards the downside. And this particular market when breakouts have been working not as well, and it's a more choppy environment, I'm usually taking my gains in one to two sessions instead of the three to four sessions. So that's pretty much the gist of this setup. As we could see a lot of these, for example, MNSO, we had a gap. We have the nice bearish engulfing candle here broke below the recent lows. And we had a nice gap down and go, nice 11% down. Again, as you could see, most of these stocks are in pretty large downtrends. Moving averages are starting to roll over. For example, TDoc, nice, you know, range expansion towards the downside. We see the same thing in other 5% down day stocks are in a downtrend. You know, LSPD, this one has more relative strength, but same concept. Tasks have actually a lot more relative strength. And once we broke below 5353, we saw that continued downside. Ideally, you're going to want to see stocks have no short-term resistance levels near them. For example, LSPD, below 62.71, we don't really see support until the lower end of this range near 56. For looking at MNTS, you know, once we break 10.19, we don't really see any really good support till 9.70. That didn't even really hold when we retested the lows at 841. So again, quick recap. You want to see tight consolidation in ranges. And when you see the breakdown candle of volume, you either enter at the breakout or, you know, right at the ending of the session, you're looking for two, sorry, one to four days of continuation. I quickly want to pull up General Dynamics Corp here as a bad example. First, you see that the ADR, the average daily range is only 167. While all of these other stocks have an average daily range of four to seven. So that means that in average day, this is going to move maybe 1.5%. Second off, we have a nice range here, but we do have a very long lower wick and it closes below the lows of the day. So that's why if you wait till the end of the day, you're going to make less money, but it's a safer trade. We did break this trend line, but it back tested and you barely gained any profit of only 85 cents. When you're playing these 4% movers, it's a lot easier to get, you know, five, six, 7% gains. In addition, what you want to look for is when you see these types of setups, you want to see stocks that in the past have, you know, a history of going down on range expansion. So we have a gap down below the level, range expansion. Upside, range expansion. Gap and go the upside, range expansion. Same thing over here. If we go to something like LMND, lots of range expansion over here, same sort of set, got nice bullish continuation, nice one day of follow through if you held it for a little bit longer, potential 11%. A lot of examples on both sides, a nice rally, consolidation, breakdown, and we had that gap down and go. It chopped a little bit, but if you held your position on 10 bars, it would have been 36. Even if you closed three days later, that's 8%. So these are the types of setups that you want to be looking for. It's a lot easier to short stocks that are continuously going down than stocks that are making double tops or lower highs in markets where the smaller caps are weaker, where you're starting to see a lot of breakdowns, the larger caps are starting to make new highs. If we're starting to see setups like this where the indexes are making lower highs or taking old support as new resistance, then it's going to be easier taking those setups where you get a double top and a drop or a lower high with, let's say an anchored view up in a moving average line up in a short. But for in this current market climate, we don't want to use this setup. So if you want to be successful using this strategy, I would recommend studying as much of these range expansion patterns as possible, looking for notes. And while you do that, please keep in mind the market conditions. This is not a strategy you're going to be able to use for most of the year. There is selective time periods or where this will work. And when it does, it works very well. Usually when you go the downside, the percent gains are more. So that's why you're able to get these six, seven, eight percent moves in one day. And these are very good sort of day trades to week four or five day trades that you can take without having to sell your positions and it could be acting more as a hedge when you can make additional income while you're doing your sort of longer term position or swing trades. So I hope you guys enjoyed this video. I hope you guys learned something and I hope you guys have a great trading week.