Strategy Description: A stock within a intraday downtrend that is constantly making new lows is a decent short candidate. However there are particular distinguishing factors that determine how to play it.
(1) A new low is always confirmation of the trend.
(2) However, a new low isn't necessarily a reason to establish a new position, but it is usually a reason to establish an add (a momentum lot) to take profit on pretty quick smart.
(3) The behaviour around the lows before it breaks determines whether you should be shorting full size on new low.
Compare ZFGN around midday as it tightened to it's lows, right on the downtrend low and below the morning range to ZFGN around 10:30ish as it made a new low and to PWR as it made a new low. All of those were certainly validation of the downtrend, but only the first example was a signal to establish a full position size. The other 2 examples you want to be shorting full size on either retests or on pops of some sort. And adding a momentum lot (of roughly 1/3 or so) to have profit taken quickly on the new low.
ZFGN:
PWR:
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