Incidentally, when I first began trading, I used to look to buy stocks that were making 52 week lows, thinking that I was picking up companies at a "discount." After all, I thought, to make money in the market, one must "buy low, and sell high." I later realized that what comes to mind instinctively is often the worst thing you can do when it comes to trading. The hectomillionaire commodity trader Richard Dennis summed up this fact when he was quoted as saying, "If it feels good, don't do it!"
What to short: VIPHow much to short: 170 shares (based on a hypothetical $10,000 portfolio and risking 3% on the trade)
Current Price: $5.99
When to cover at a loss: Based on the stocks volatility, my method says to place a buy stop at $7.75
When to cover at a profit: After a close above the 50dma
