Be able to Comfortably Go Short as You Go Long
Learn to trade both sides of the market. Be able to go short as comfortably as you go long. Selling shorts, you can make money quicker than going long. If you are involved in the stock market, you know how fast stocks slide down to earth than stepping up.
There are several strategies for accumulating a position based on the type of market your are trading. When you trade bull market, it goes up very slowly and methodically, you can buy a portion of your stocks and accumulate more stocks or future trades as prices continue to improve.
When you liquidate positions at the top of bull move, you should sell out all of your stocks and future trades you are holding. And if you miss the chance to decide the top, you have to lose the portion of profit and sell out your long positions.
What will be your next choice? When the bull market ends and you have no position in the stock market. What now, stay out of the market till market downs further and another bull market starts? or going short? You have to apply all of that principles and all the rules you use for being long on stocks. If you go short it is as simple as and as risky as you go long.
Never try to catch the ‘free fall’ of the market, nobody can be sure when and how it will appear in the stock market. ‘Free fall’ is a sharp down movement, when within a couple of days market slides down to 20 to 30% and market sentiments is such a bad, nobody wants to buy the stocks except short sellers.
Still, short seller can make money in one third of time than in bull market. And moreover, the buying power is five times greater at the bottom than at the top. This is a secret to successful playing the short side. Not because you can make money faster, but because you can buy real bargains at the bear market’s bottom.
You would also like to read,
Trading Rules and Principles of stock markets
Learning lessons from the Stock Market…….
.
Related Reading:
Super article you have got here. Will keep coming reading these good articles you are going to write. Maybe you want to check out this