I remember it like it was yesterday, in late 2000 Dell warning out of the clear blue, blamed it on the Euro, then Intel, then many others. I remember all the one day wonders, huge rallys as shorts were squeezed on an Osam Bin Lauden rumor in 2002, or remember this one, the suprise rate cuts by the Fed. The news wires would put out all these predictions from former fed goveners that the fed was going to cut rates and boom 200 point rally in the dow. Shorting is risky business, and you must always be on your toes. Things seem to be linning up in simular fashon as we move forward. Earnings have been weak and guidance has been weak. looks like thing are rolling over.
I really dont understand how shorting is any riskier then going long. To me, shorting has the same principles as going long just that you want price to go down rather then up.
The reason why you don't understand that there is a difference in going short or long is because THERE IS NO DIFFERENCE. People say when you go long the most a stock can decline is by going to zero, but on a short the stock can keep going up for years. Well if you don't have mental stops on when to get out going long or short then you are just a fool. There is absolutely no difference in risk.
Thats an exaggeration. I could not think of anything else I would rather do, I LOVE MY JOB, its not even work its pure enjoyment.
Why is shorting 'risky'? There is the same amount of risk whether you go long or short - you may win or you may lose either way. This is exactly why the markets plummet when they head down and fast - all the longs panic and have no idea what to do! So, actually, it's probably best if people are afraid of shorting b/c it makes taking that $ so much easier.
Here's an idea - you could go long a short ETF... http://www.elitetrader.com/vb/showthread.php?s=&threadid=72725 And then, when you think it's heading up, you could short the short ETF.
Correct me if im wrong but haven't most of the trading blow ups by professionals been when they were short and kept cost averaging their position. I know thats what happened to Victor Neiderhoffer, I think he only trades from the long side now.