RE:Primer for shorting for retail traders Great advice for those on the losing side of the market. I, too, have a conviction that vast majority of commentators on these boards are amateurs, and sadly, it appears they lost a lot of money. Market is neither efficient, nor smart. Going long on heavy-debt-negative-p/e-failing-acid-test-ratio companies like Concordia Healthcare is akin committing suicide. But new traders still think they can outsmart 1-5% of professionals who consistently make money in the markets.
Here is my advice for everyone. Take it or leave, your choice.
Before placing a trade:
1. Utilize Technical and Fundamental Analysis (good start is to learn financial ratios)
2. Calculate your stop loss (use Stop Limit Order to limit losses)
3. Do not trade stocks that don't have sufficient liquidity (you need to get in and get out fast).
4. Don't marry your stock for long term. Swing trade - collect profit and exit your position.
5. Shorting is another way to make profit on failing companies, providing your brokerage has enough shares to loan you. If your brokerage does not have any shares to loan, DO NOT trade OPTIONS. Stock market is NOT a zero-sum game, but Options are 100% zero-sum and in reality it's harder to make money with options (most of them don't even get exercised).
PROtrading wrote:
Shorting isn't investing, it's trading. Surprisingly, I received a questions from a fellow retail on why I'm shorting CXR from and how to do it. Why I'm doing it is out in the public here, I'm not a typical SH trader that are "2bit", I post my trades and I'm always honest. That why the crooks come after me all the time with their clown nerf guns.
First DON'T SHORT! If you are a retail investor, DO NOT SHORT unless you are super proficient on the trade. I'm not a regular retail because I worked for the street and I have a total mistrust of the markets and the scum that makes it up. And I trade all day except certain times of the year. Many of the the street traders here are actually worst bad "house of cards" CEOs! ;-) LOL That's why I love the real pros that disclose their positions. Those guys deserve a freaking metal and you know they are great people and traders.
Retail trading platforms SUCK and are not designed for shorting. Plus, you're playing with real market pros. BIG sharks. Some of these shorters here are REAL PROs. They aren't little retail. They *are* the street. I can bet you that 99% of the shorters here are professional career traders, not small retail self investors trying to swim in a sea of sharks.
You can have unlimited loses if you don't watch the trades (but unless you trade all day, you can't!). So best to find some good investments that you can buy, hold and forget. Checking it every so often.
Now, if you really want to short, call your brokerages to walk you through, you likely won't be able to figure it out yourself because the platforms suck and don't be surprised the investment rep on the other hand doesn't really know what they are doing. Ask them how many retail investor short and you'll see why.
There are some really odd rules that are setup by the street for the street. The 20% percent limit between the stop loss and limit price is one of them for example.
Good luck and again, unless you daytrade, do NOT short. Most pro shorters cover by the end of day and work with huge amounts and penny differentials.