“If I go short, how can I protect myself from a short squeeze forcing me to return the security at a higher price than I received when I took the short position…”

Feedback in:

Hi Michael,

I am trying to build my own ‘Dragon Portfolio’ as outlined in Chris Cole’s whitepaper titled ‘THE ALLEGORY OF THE HAWK AND SERPENT.’ Commodity trend following is a big part of this portfolio. Chris Cole suggests a simple approach of taking a short or long position on an ETF tracking commodity prices based on whether the current price is above or below the 50 day moving average. If I go short, how can I protect myself from a short squeeze forcing me to return the security at a higher price than I received when I took the short position?

Thank you

Arend

I teach trend following. You don’t trade one market alone leaving yourself open to a short squeeze with trend following.

Filed under Trend Following