Comments on: Trading 101: Recommended Reading - ‘How to Make Money Selling Stocks Short’ http://tradermike.net/2005/01/trading_101_recommended_reading_how_to_make_money_selling_stocks_short/ Trading, Stocks, Stock Market, Money Mangement & Risk Management Sat, 22 Nov 2008 10:36:35 +0000 http://wordpress.org/?v=2.6.3 By: Michael http://tradermike.net/2005/01/trading_101_recommended_reading_how_to_make_money_selling_stocks_short/#comment-1025 Michael Tue, 04 Jan 2005 04:02:12 +0000 http://www.tradermike.net/2005/01/trading_101_recommended_reading_-_how_to_make_money_selling_stocks_short/#comment-1025 I agree that longs are easier to trade for various reasons and can be much more profitable. If I had to choose just one side of the market I'd choose longs. But since I don't have to choose... I agree that longs are easier to trade for various reasons and can be much more profitable. If I had to choose just one side of the market I’d choose longs. But since I don’t have to choose…

]]> By: billyjoerobidoux@yahoo.com http://tradermike.net/2005/01/trading_101_recommended_reading_how_to_make_money_selling_stocks_short/#comment-1024 billyjoerobidoux@yahoo.com Tue, 04 Jan 2005 03:57:42 +0000 http://www.tradermike.net/2005/01/trading_101_recommended_reading_-_how_to_make_money_selling_stocks_short/#comment-1024 Have you calculated your results on shorts versus longs? Longs have been much more successful for me, for the simple reason that I have a few triples on the long side but none on the short side. Just by virtue of the fact that shorts tend to be crowded with shorts tend to make them more volatile because susceptible to squeezes. Add to that the unfavorable arithmetic and I'll stick to the bull markets. Have you calculated your results on shorts versus longs? Longs have been much more successful for me, for the simple reason that I have a few triples on the long side but none on the short side. Just by virtue of the fact that shorts tend to be crowded with shorts tend to make them more volatile because susceptible to squeezes. Add to that the unfavorable arithmetic and I’ll stick to the bull markets.

]]> By: Michael http://tradermike.net/2005/01/trading_101_recommended_reading_how_to_make_money_selling_stocks_short/#comment-1023 Michael Tue, 04 Jan 2005 02:33:21 +0000 http://www.tradermike.net/2005/01/trading_101_recommended_reading_-_how_to_make_money_selling_stocks_short/#comment-1023 I don't agree with a blanket statement that says stocks are more volatile on the way up than on the way down. One could find plenty of examples to support the opposite argument. I look at the market this way -- it goes up sometimes, sideways some time and down some of the time. Identifying the direction depends a lot on what time frame you're considering. A year-long sideways move may be twenty up moves and twenty down moves. Take the current market for example, I could say the NASDAQ has just been going sideways since 1999 when it was around 2150. But there have been great long and short opportunities . Just as there's always a bull market in some sector or stock, there's always a bear market somewhere. Given that I think it makes good sense to search for all money making opportunities be they long or short. I don’t agree with a blanket statement that says stocks are more volatile on the way up than on the way down. One could find plenty of examples to support the opposite argument.

I look at the market this way — it goes up sometimes, sideways some time and down some of the time. Identifying the direction depends a lot on what time frame you’re considering. A year-long sideways move may be twenty up moves and twenty down moves. Take the current market for example, I could say the NASDAQ has just been going sideways since 1999 when it was around 2150. But there have been great long and short opportunities .

Just as there’s always a bull market in some sector or stock, there’s always a bear market somewhere. Given that I think it makes good sense to search for all money making opportunities be they long or short.

]]> By: billyjoerobidoux http://tradermike.net/2005/01/trading_101_recommended_reading_how_to_make_money_selling_stocks_short/#comment-1022 billyjoerobidoux Tue, 04 Jan 2005 01:29:57 +0000 http://www.tradermike.net/2005/01/trading_101_recommended_reading_-_how_to_make_money_selling_stocks_short/#comment-1022 Of course you can get stopped out going long, but stocks don't tend to be more volatile on the way down than the way up. And it's true that it's no good going long in a bear market, but most markets either trend sideways or up. There are far more up 20% years than down 20%. Of course, if you trade over a timeframe of a few days, short or long is pretty much the same. It's been my experience, though, that it's much harder to identify shorts than longs, with the exception of 2001 and 2002, which was a far from typical market. Of course you can get stopped out going long, but stocks don’t tend to be more volatile on the way down than the way up. And it’s true that it’s no good going long in a bear market, but most markets either trend sideways or up. There are far more up 20% years than down 20%. Of course, if you trade over a timeframe of a few days, short or long is pretty much the same. It’s been my experience, though, that it’s much harder to identify shorts than longs, with the exception of 2001 and 2002, which was a far from typical market.

]]> By: Michael http://tradermike.net/2005/01/trading_101_recommended_reading_how_to_make_money_selling_stocks_short/#comment-1021 Michael Mon, 03 Jan 2005 20:29:25 +0000 http://www.tradermike.net/2005/01/trading_101_recommended_reading_-_how_to_make_money_selling_stocks_short/#comment-1021 You could have the exact same scenario (getting stopped out and missing the move) for longs. And yes, you can obviously make greater percentage gains going long than short but that fact does you little good in a bear market and/or a stock that's sinking. You could have the exact same scenario (getting stopped out and missing the move) for longs. And yes, you can obviously make greater percentage gains going long than short but that fact does you little good in a bear market and/or a stock that’s sinking.

]]> By: billyjoerobidoux http://tradermike.net/2005/01/trading_101_recommended_reading_how_to_make_money_selling_stocks_short/#comment-1020 billyjoerobidoux Mon, 03 Jan 2005 20:10:57 +0000 http://www.tradermike.net/2005/01/trading_101_recommended_reading_-_how_to_make_money_selling_stocks_short/#comment-1020 Looks interesting. If the emphasis is on market direction, the market is usually either going sideways or up. Of course, for two years it went down, and that was when you should have shorted Cisco, Sycamore, etc. Here's another question: if you have an 8% stop loss and and a 16% target, it is very easy to imagine a volatile stock that goes down 50% but the short loses money because he is stopped out so many times. The arithmetic is not in your favor: from $10 to $5 is half as profitable as $5 to $10. Looks interesting. If the emphasis is on market direction, the market is usually either going sideways or up. Of course, for two years it went down, and that was when you should have shorted Cisco, Sycamore, etc. Here’s another question: if you have an 8% stop loss and and a 16% target, it is very easy to imagine a volatile stock that goes down 50% but the short loses money because he is stopped out so many times. The arithmetic is not in your favor: from $10 to $5 is half as profitable as $5 to $10.

]]> By: Chase http://tradermike.net/2005/01/trading_101_recommended_reading_how_to_make_money_selling_stocks_short/#comment-1019 Chase Mon, 03 Jan 2005 03:24:28 +0000 http://www.tradermike.net/2005/01/trading_101_recommended_reading_-_how_to_make_money_selling_stocks_short/#comment-1019 Quite interesting Quite interesting

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