Originally posted by: rlh
Originally posted by: arch_8ngel
You do you. But I think it is a bad idea.
I think you are missing the point of how much extra risk a short position can carry, though, versus how much you THINK you're putting at risk.
(i.e. it isn't as straightforward as buying long positions where your investment is your maximum risk on any given purchase)
I do understand. And, in fact, I'd never invest just short sales. But, there's something to be profited to reading, reading, reading the data paying attention to hype over substance and being patient to watch the hype run thin. Yes, though, shorts are very dangerous. That's why I'd never strictly invest in shorts but I also would like to have the option.
If you want the option, you just need a normal taxable investing account with a major brokerage.
(can't trade shorts, options, or margin in a 401k or IRA of any kind)
I still wouldn't recommend it, though, since it's the kind of market timing behavior that is statistically more likely to cause you trouble in the long run versus keeping it boring.
In your fantasy trading, did it take the realistic costs (and even availability) of shorting into account?
Because what you're talking about (finding "obvious" peaks) tends to involve conditions where shorting may not even be possible/practical due to lack of availability.
