Forex Blog by Greg Secker

Shorting – The RulesIt is essential that : We only short stocks that are in sectors that are not in the current economic cycle phase, and are also not performing. The stock is below both of it’s moving averages (50 & 200) or is breaking through it’s moving averages. There is negative sentiment surrounding the stock. You always have a stop – otherwise you could end up taking never-ending losses. You have a risk to reward ratio of at least 1:3. You adhere to correct money management. The Fundamental Rules Ideally the stock would have : Negative current assets Decreasing revenues Operating margins of less than 10% Confirming indicators Ideally the stock would not : Have a high PE – as there could be a good reason why and it may move higher. Be a thinly traded small cap stock – as these can be easily run up in value. The markets have been less predictable Current volatility requires more focus on : Price action of the stock Setups (Reverse power plays, descending triangles, double tops etc.) Market direction News Oil With the market failing to find any longer term direction you need to be able to trade long and short.

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