To avoid losing money in short investments, choose highly liquid stocks
Liquidity in the financial markets refers to how easily a given financial instrument can be sold, and is a reflection of the number(s) of people involved in buying and selling the instrument.
When many people are buying and selling a stock, we say that there is much liquidity. When only a few people are buying and selling, there is low liquidity.
The more liquid the stock is, the ‘tighter’ the bid-ask spread. Purchasing highly liquid stocks minimizes the loss when stocks are sold immediately after purchasing. The bid-ask spread represents the minimum we must make not to lose money.
And, the wider the bid-ask spread, the more lost immediately after purchase.