Shorting

[Salty Gibbon]

As a day-trader I feel that I should trade both intra-day up-trends and intra-day down-trends in order to take full advantage of the daily market movements.

This means that I should go long and short as the situation demands.

However, my natural inclination is to go long and I seem to have an inbred dislike or even fear of shorting.

I do not know why this is but I would like to hear from other day-traders what their feelings are about shorting stocks.

Are there day-traders who only go long ?

Are there day-traders like me who do short stocks but feel uncomfortable in doing so ?

Why do you think those kind of feelings ( ie. fear and discomfort ) exist when shorting stocks ?

 

[Mr. Charts]

No, I love shorting stocks as price falls are usually faster, more dramatic than rises and produce profits faster.
Richard

 

[oatman]

Your inbuilt fear of shorting is common. The best markets in my opinion are bears as they are easier to read. It's easier to see where the sh!t will hit the fan than to decide who and where someone will buy. Volumes, however, are always lower.
That's easy for me to say :cheesy: My introduction to commodity markets was a in a bear run.
It was never easy to get a client to sell but if you gave the slightest hint that it might bounce, he was in like a shot.
That's human nature and markets

 

[Salty Gibbon]

No, I love shorting stocks as price falls are usually faster, more dramatic than rises and produce profits faster.

Trading Masters need not post on this thread - just joking !

I knew you would say something like that Richard, lol.

 

[options]

Agree with Mr C. I much prefer shorting to longs. Quicker movers as a general rule.

Though most people started off by buying shares, where you could only benefit from a price rise. At least that used to be the case for us old uns. Perhaps some of the younger members who started off with sb companies don't have that type of 'hang up'.

Just go with the flow of the market. Once you hit a couple of nice downers, I'm pretty sure you won't mind shorting.

 

[minx]

Absolutely no preference at all.
One exception actually, I refused to short Cocoa after the recent spike up but that was more being terrified of the same happening again

 

[keano]

If anything im probably the oposite. Love a good short!

 

[Mr. Charts]

Trading Masters need not post on this thread - just joking !

I knew you would say something like that Richard, lol.

Ha ha Salty
Yes, most people are pre-programed to be anti-shorting by previous experience of long trades that have gone wrong. They remember that pain and the memory engenders fear and discourages them from shorting.
The elimination of that emotion is essential to be successful long term - if it seems hard to be unemotional then you've got to get used to it when you are trading as emotion is your own worst enemy as it destroys objectivity.
The best way is to paper trade shorts for a brief period then do it for real but with small size to limit the emotion which comes with the real thing. In other words it's about self control and re-programing yourself to do what you logically know is the correct thing.
Anyone who still can't do it needs to tell themselves that all new beginnings in life are difficult but if all those other folk out there have the courage to short, then you are just as good or better. Life is about doing difficult things bravely sometimes.
As for you Salty, the above doesn't apply to you, you can most certainly do it !
As Oaty says, do it a couple of times and you'll start to enjoy it ;-)
Richard

 

[Salty Gibbon]

I certainly short stocks Richard but I just don't have the same level of comfort as when I go long.

Usually, when I short, I do it with half the size that I use when I go long.

 

[Trader333]

Personally I have no issue with going Long or Short but I can see why some people may do when trading stocks (this is not applicable to indices):

1) It is not as easy to go Short as it is Long when you take into account the uptick rule and the fact that sometimes Shorting is not permitted.

2) The "theortical" loss in Shorting is unlimited whereas this is not the case with Long trades

3) Because of the uptick rule, when going Short you can only enter when the market actually moves against your intended direction.

4) Many people are brought up to think positively and Shorting can be seen as counter to this.

All that is needed is to change how you view going Short.


Paul

 

[Roberto]

I seem to have an inbred dislike or even fear of shorting.

Must confess that I'm slightly the other way round, if anything. It seems to me that things are slightly more likely to collapse suddenly than to take off suddenly, so I feel more nervous about going long.

 

[ardhill]

I will short as fast as going long, it makes no difference. I just want to trade in the direction of the market at that exact time.

Though as others have said, shorting can be very profitable quickly, especially if panic selling sets it.

As far as the uptick rule is concerned, 'IF' you get in before the panic, you can create your own uptick by offering your short on the ask side.

Just the other day I watch TZOO as the price just fell from under it, everyone on the bid just vanished. The stock must have lost $2 in less than a minute (and no sadly I wasn't shorting it at the time).

 

[axthree]

I have an aversion to shorting.
Every time I do so, I remember all the millions of people doing all they can to move, wish, markets up and my knees go all wobbly.

 

[TheBramble]

I have an aversion to shorting.
Every time I do so, I remember all the millions of people doing all they can to move, wish, markets up and my knees go all wobbly.

I have the same feeling in both directions.

 

[jsd]

As a day-trader I feel that I should trade both intra-day up-trends and intra-day down-trends in order to take full advantage of the daily market movements.


However, my natural inclination is to go long and I seem to have an inbred dislike or even fear of shorting.



Why do you think those kind of feelings ( ie. fear and discomfort ) exist when shorting stocks ?

your second above answers the 3rd.

what are the thoughts you initially have about shorting ? write them down maybe to see how you or who has installed this fear/discomfort.

But know you can change your belief if you want to.

You could of course attempt to force the external situation by turning your charts upside down or stand on your head and look at the screen. This will make the illusion of the external of a short appear to be a long with a nice sudden rally. but deep down you'll know its still a short and it will still feel odd maybe.

Easier then to turn your belief about shorting upside down.

But again you would do this to then make a decision will i short and long ? will i just short or both. You are unique thats your call only, but you need to be/have and position yourself mentally neutral to accept and see both sides of the "market opportunity" .

so back to the first exercise... what do you find wrong about shorting ? what do you think will happen to you when you take the short side ?

jd.

 

[eddyjo]

Wobbly Knees

I have an aversion to shorting.
Every time I do so, I remember all the millions of people doing all they can to move, wish, markets up and my knees go all wobbly.

hope your knees dont wobble while your flying

 

[oatman]

You could of course attempt to force the external situation by turning your charts upside down or stand on your head and look at the screen. This will make the illusion of the external of a short appear to be a long with a nice sudden rally. but deep down you'll know its still a short and it will still feel odd maybe.

You would certainly look odd
We used to force our bear point by turning charts upside down in front of a mirror and ask "would you buy this market"?
I think Updata had the facility to flip charts.

 

[roguetrader]

I must confess that I too share some inbuilt discomfort in shorting, though strangely I have narrowed the problem down to being largely the complexities of getting short, ie uptick rule etc. How? Well I have little or no problem shorting index trackers such as DIA, SPY, SMH, etc where no uptick rule applies, although it could simply be that a general market movement "seems" easier to predict.
I had heard a rumour some months back that there were moves afoot to remove the uptick rule.

 

[axthree]

hope your knees dont wobble while your flying

That's how I keep straight on the roll out after landing.
The wobble is caused by my takeoff