Many traders make the mistake of panic shorting in an up trending bull market or stock at the first sign of weakness, and at other times bottom fishing by buying stocks that are falling in a down trending bear market. The first thing a trader must determine is are they trading in a bull, bear, volatile, or range bound market. In bull markets the money is on the long side, even if you short correctly you will greatly under perform people simply long the market for the up trend. If you try to catch falling knives in a bear market you will also lose money.
Bull markets have no long term resistance and bear markets have no long term support.
We now have people in a panic because some stocks pulled back to there 10 day moving averages? Some pull backs are healthy to burn through sellers and get an established price base so a stock can continue higher on earnings expectations. Apple is down 1.25% and people think the run is over. It may be, I do not predict, trailing stops and stop losses make the majority of my decision. My main concern is always to have no more than 1% of my capital at risk in any one trade.
In bull markets dips to key moving averages are time to buy not sell short. The facts are today we are in a very small correction that has been met with support right where it should have been in all the charts I have been watching. The correction may expand and we could very well get a sell off, but no one has a crystal ball so I manage my risk per trade and simply react to what the market is doing and I do not predict what it is going to do. Today it told me to buy the best stocks in the market because they were bouncing at key supports, so I did. Tomorrow it may tell me to sell them all because they have hit my stops. So I will be listening.