A short-selling strategy that identifies stocks with the most bearish price structure and profits from their continued decline using bar-level pattern analysis.
This page explains the Taurus bearish structure strategy. You'll learn about the proprietary bearish structure scoring system, how stocks are ranked for short selling, and how the portfolio is constructed.
The Taurus strategy is a systematic short-selling approach that analyzes price bar structure over a proprietary lookback window. Unlike momentum-based approaches, Taurus focuses on the micro-structure of daily bars to identify stocks with the most persistent bearish characteristics.
Each stock is assigned a composite bearish structure score combining multiple bar-level factors. Lower scores indicate more bearish structure, making them better short candidates. The scoring uses a proprietary lookback window.
Short selling carries unique risks compared to long-only strategies. Understanding these risks is essential before considering this strategy.
The strategy incorporates several features to manage short-selling risks.
All trading signals are generated at market close (Day T) and executed at the next day's open (Day T+1). This ensures realistic backtesting without look-ahead bias.
After market close, calculate bearish structure scores for all qualifying stocks using the proprietary composite. Select the most bearish stocks for the short portfolio.
At market open, cover short positions that are no longer in the target list and open new short positions. Equal-weight allocation across all positions.
All performance figures are based on historical backtesting and are hypothetical. Past performance does not guarantee future results. Short selling involves substantial risk including unlimited loss potential. The backtest assumes perfect execution at open prices with no slippage. Stock borrowing costs and fees are not factored into the results — real-world returns will be lower after accounting for borrow rates, which vary by stock and broker. This is educational content, not investment advice.