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Strategies & Market Trends : Playing the QQQQ with Terry and friends. -- Ignore unavailable to you. Want to Upgrade?

To: Jill who wrote (588)	6/3/2005 12:56:00 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 4814

Shorting is very easy: 1. You initiate a "sell short" transaction with your broker. This includes, in the same transaction (one-click)---broker loans you the shares or borrows them somewhere, broker immediately sells the shares at market, broker deposits cash proceeds from the sale into your account. That's it. You're done, except for setting the stop! When you want to cover the short, you do something similar: You initiate a "buy to cover short" transaction with your broker. This transaction (usually one click) will include your broker taking the cash that was deposited in your account from the first transaction, then buying the same number of shares at market, then anything left over is yours to keep. Done deal. By the way, I would be very careful with long positions in a downtrending stock. Usually that is very risky business, because the volatilities are working against you. The volatility is to the downside, and the stronger the downtrend, the more of the volatility is to the downside. That means that your risk/reward ratio INCREASES. The stock can turn against you hard, in a hurry. Just the opposite is true if you are short selling the same stock---the risk/reward ratio DECREASES, and the volatilities are in your favor. That is one reason why I think it best to look for long positions in strongly uptrending stocks, and short positions in strongly downtrending stocks. Then, adjust the relative amounts allocated to each according to the sector trends, and especially according to the market index trends. In a strongly trending market, you want most of your trades to be aligned with that trend----mostly long positions in an uptrending market, mostly short positions in a downtrending market. The trend is your friend.... T