Comment: If you're going to short, just keep a tight stop

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Michael Nystrom's picture

If you're going to short, just keep a tight stop

Predicting the actual top is a pretty low probability event, so expect to get whipsawed.

In response to the question, 'how do you prevent getting whipsawed?" One great trader replied, "Don't trade."

The moves down are much quicker than the moves up. There is the potential to make some money here, but it is not a slam dunk. It never is. Keep a close eye on, and keep the shorts on a tight leash, don't over trade, and don't overcommit!

Plus you never know when the Government is going to swoop into the market, through word or deed, and cause a massive short term rally that is only exacerbated by short covering. And before you know it, we've got a 5% up day in the midst of a bear market.

He's the man.