Never leave money on the table.

[Scataphagos]

If it can happen, it will probably happen to me. Actually it has happened to me. Lesson learned, don't short individual stocks.

I read one of Bill O'Neill's books... he said he "made money shorting only 2 times in his 40-year career".

While "up" is the opposite of "down"... it is NOT true that a bear market is the mirror image of a bull market. The PSYCHO of the bull and bear are waaaaay heavily slanted towards the bull side for many reasons and factors.... even in a bear market.

Trying to make money on the short side is for those who are bold and experienced. The "wind is in their face", yet they try to make money anyway. That is NOT a "low risk" game considering all the forces trying to (1) always make the market go up, and (2) stop the market from going down.

The conservative play (and most likely to succeed) is to "keep your powder dry and play only when the wind is at your back". Very few "smarty-pants" short-selling traders survive in the long run.

FWIW...

 

[speedo]

This is true for currencies, but not (exactly) for equity indexes. They behave ever-so-slightly differently going the other way.

I haven't traded currencies (or stocks) in years but I have traded the ES for the past 18 years and my setups are the same for long and shorts, simply reversed. There are many on these threads who have never experienced a bear market. In a bull, there are no lack of good long entries. In bear market conditions, shorts pay better, whether it is a bear market or simply a bear correction (a bear market is just a longer correction). We all have our own trade plan, you have to decide what works for you.

 

[tomas262]

Rules I follow when shorting companies. I avoid shorting:

• when required margin > 100%
• when shorting fee is significantly higher compared to "average fees"
• when liquidity is low
• price is below 20
• health&biotech

 

[SimpleMeLike]

I pulled the first paragraph from Investopedia's
article titled "20 Rules Followed by Professional Traders".

Long-term profitability requires two related skill sets. The first is to identify a set of strategies that make more money than they lose and then to use the strategies as part of a trading plan. Second, the strategies must perform well while the market experiences both bull and bear impulses. In other words, while many traders know how to make money in specific markets, like a strong uptrend, they fail in the long run because their strategies don't adapt to inevitable changes in market conditions.

Imagine playing a Poker game where the Dealer
removes half the cards from the Deck.
A football game without a running game,
where the Quarterback only throws the ball
every play. How about a basketball game
where no player ever takes a 3 point shot.
Sounds like a winning strategy?

I trade fulltime and would never only
trade one direction. It makes absolutely
no sense to me, not to mention I'd
be leaving 2/3 of my profits on the table.

The Youtube weekend warriors are not aware
the winning minority in the markets ALWAYS
trade both directions. I've read hundreds of
trading books, and all of them achieved
and MAINTAINED success by understanding and practicing this basic concept.

Hello mikeriley,

I do not discriminate long or short.

I am Slave to the direction of price.

If price shows up, I trade up.

If prices shows down, I trade down.

Master = Price

Slave = SimpleMeLike

 

[murray t turtle]

For example, inverse SPY over the last little while

View attachment 284771

VS a real bull market

View attachment 284772

Notice in particular how little time the inverted SPY chart spends at the highs.... As I said, ever-so-slightly.

%%
Good points + good charts\ but when i Short them by a click\cuts waaaaaaaay to much off the edge @ right. LOL
I dont think shorts/inverse are like leveraged longs/or longs @ all or much like them.
Inverse give profits faster \take away profits faster.
Most leveraged stuff pays NO dividends also, TZA used to , no more ; +SPXL/ UPRO / UDOW may pay a bit but NOthing like SPY

 

[tiddlywinks]

If price shows up, I trade up.

If prices shows down, I trade down.

Tiddly Winks
Founder, Dead Fish Trading, LLC
Go with the flow!

 

[comagnum]

Always been a long/short trader. I am far more selective when shorting a stock since the risk is unlimited - especially if your holding days to months like I do.

The math of trading significantly favors the long side, although there is still plenty of room for making out on shorts if you know what you are doing & bring an A game with risk/trade mgmt.

Buffet's panic Covid exit sets the stage: An equal size move nets 63% short & 173% long. This illustrates why the long side has far more reward-to-risk not even counting the the carry cost for holding a short which can really add up.

 

[murray t turtle]

Long, short -..... If a market is directional...participate.

%%
ME 2/mostly 2 you mentioned.

I trade long only. It's what I do. It's what I know and what I make money doing. When I don't have a market that will give me a long trade, I sit on the sidelines.
My objective is to make money, not to keep busy.

I'm envious of those who trade both ways.

%%
I used to be that way+ still I am mostly that waY.
I do long only /but use long inverse ETFs instead of shorts/big advantage= NEVER get a margin call /@ all [Small disadvantage \decays abit/not much decay.]
Another small disadvantage for some but not me \if one is real used to for years shorting stock + very pictorial person it looks so strange to make money on a bear trend when it goes up LOL.
BUT NO way does a bear trend work anything like a bull trend/especially with leverage\ a bear will make money faster + make losses faster + some times deeper. And that'$ just a order slippage comment /trends even more so.
To answer your question from earlier in MAY, sure i'm responsible for my losses but another way to look @ it follows.
FEW bear funds , many bull funds,many many, many win/win / long mutual funds. My comment$ only apply to ETFs, + sure dont apply to crypto cr*p.........................................................................

 

[SunTrader]

" ...... risk is unlimited..."

Except probabilities are zero might happen before unlimited ever does.

I go with probabilities.

 

[murray t turtle]

Rules I follow when shorting companies. I avoid shorting:

• health&biotech\ +price below $20

%%
LOL good points] i seldom do biotek or semiconductor inverse , simply too wild/\sloppy of a trend.
The TNA\ small cap bull X 3 is about the same way.
A daytrader may do ok with those, but so many choices better for me anyway .
Price [$20 ]does not seem to matter much on ETFs;
even though SPXL looked much better than UPRO yesterday.
Almost the same thing except upro,in $40s, better volume ; SPXL in $80s + pays a bit better dividend..........................................................................................................