• 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