Current Trade

Tuesday, December 21, 2010

Shorting


If you google any type of subject that you think will be a good google search you will likely come up with not very much,,, it seems that shorting can be done by retail investors, but the records and statistics are reserved for institutional investors... this makes it hard to take a productive part in such an endeavor.

That being said it now comes down to how to best use some type  of strategy to pick good potential shorts.

They should be stocks that are above the dollar threshold for 1 of many reasons, but the most probable is that the broker your dealing with won't allow shorting of stocks under the dollar threshold.

The second consideration would be to short obviously poor stocks that have no money, are in debt, and have extremely higher floats, and that have spiked or had good runs to nosebleed heights for share price which are on the cusp of a broad market downturn.

You must be able to accurately recognize the trend as down... The reason for this is that a broker can close your position even if you have shorted a stock that is protected by the broker... meaning they have a supply that they can borrow stock from for you to sell. Shorting is a volatile adventure and your margin could easily be overdrawn without the proper forethought, resulting in your position being liquidated while you are in a position of loss.

Day trading shorts is a very low average profit producing trading strategy against a high average of potential pitfalls.

If your going to do it then you need to consider Market Club trending triangle trade technology

Dave GLTA

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