So how do you short a stock? What's going on team, it's ricky with tech, but solutions and in this video i'm going to break down what i think everyone should know as a complete beginner? What is shorting what's the risk involved, and if you want to short, how do you do it, and maybe what are some criterias, that most short positions should meet right? So i hope that this video gets you one step closer to your overall goal and if it does, i really hope that it's not asking too much of you, but please consider dropping a thumbs up and, of course, subscribing. So one of the first things that i want to start off by saying is i'm going to be covering my checklist. This is a checklist, it's actually a free pdf that you can download you don't have to, but if you're interested in shorting - and you do better with structure, i actually have this pdf. That should be able to be displayed right here alongside of me, and you can actually download it for free and that's that first link in the description.

So the reason i really like making these checklists are because it makes it a little bit easier to understand what criteria a stock has to me or therefore, an opportunity has to meet before you begin to actually take action. So let me go ahead and start off by explaining what shorting is so a lot of us focus on going long, and you don't really think about that when you're, just like i want to invest in tesla, i want to invest in apple. I want to invest in facebook. This means that you're buying a stock, and your hope is that it increases in value over a period of time.

That's going long on a stock or therefore investing in a stock. Then now there's the opposite, where you go short on a stock, meaning that you actually sell the stock first, meaning you borrow shares. You sell the stock first and you're supposed to buy back the shares at a later time, but when it comes down to shorting a stock, you actually make money because you sell first as it sells off and after this stock actually loses value. You can buy it back at a lower price and you make the difference.

It sounds like much more confusing than i think that it actually should be. All it really means is, if there's a very overbought stock right, it's overvalued and you think it's about to drop. You short it and, as it begins to drop, you can add more to your short position, meaning it's making you more money and then once it begins to maybe establish a support level or it's has sold off enough. You then do the action of bind to cover, meaning you simply close that short position, meaning you don't want to hold those shares anymore, so you lock in your profits and you buy to cover so you buy at overbought levels or you sell at overbought levels, and You buy to cover at lower levels, therefore, making a profit.

So an example with that is when tesla was nearly at thirteen hundred dollars a share. A lot of people were considering shorting it uh. They they waited for a confirmation of it pulling back. They began to short it, and then they covered nearly at a thousand dollars a share, so they made the profit of the difference of a thousand three hundred to you know a thousand dollars.

So now that we talked about what shorting a stock is, how is it that you do it? Well, if you jump onto a platform such as you know, weeble, which again you don't have to use yourself, but if you guys do want to use it, the link is actually in the description. If you want to download it for free uh, it actually has the option for some of these stocks, where uh you can actually short them, and you just treat it as literally a normal normal order where you buy what you sell and you can choose to short It there's not every stock that's available to short, but the ones that are. It should clearly show it for you, uh. On the weibull platform, you work with either again limit orders market orders stop.

All of this is the same, and you just you know, enter your position, so there's no difference in shorting a stock and how you actually do it versus buying a stock or selling stock on weeble. It's done the exact same way now, let's say i short. 10 shares of pinterest, and then it sells off right and i made my money and i want to get rid of those shares we get rid of those short shares i buy to cover, so i just have to make sure that i buy those 10 shares again. Therefore, at that lower price - and i will actually make the difference so when you short a position, it will show negative shares instead of 10 shares.

It will show negative 10 shares. Therefore, you're shorting 10 shares of you know whatever stock, and then you buy 10 shares to cover to get you back to zero and you make the difference in profit. Again. It sounds more confusing than it actually is.

It's actually not confusing at all, but one of the things that i think is very very important for people to know is like you know what can be some good things to look out for when shorting a stock. I think this is the biggest question that a lot of people have. One of the first things that i want to talk about is shorting. A stock does come at a greater form of risk.

I want to tell you this out of encouragement. If you are not good at managing risk, if you are not good managing your position size, you should not be shorting. That's my opinion. I don't think someone that doesn't know how to cut losses should short a stock, because when you go long on a stock right, when you buy shares technically you could only lose the amount of money that you put in right.

You put in a thousand dollars if the stock goes to zero, you lose a thousand dollars right. Theoretically, when you short a stock, there is no, you know the numbers are infinite on how high it can go, obviously that it will only go so high right, but technically there there is no cap at how much money you can lose when you short a stock Which is why i want to remind you that shorting, a stock does come at a greater form of risk, and just because you can do it does not mean that you should just jump right into it, just like when it comes down to. If i were to ask you hey you know, if you were to invest in apple, would you feel comfortable, investing a thousand dollars, you might say, yeah, it's apple right, it's a bullish stock. It's it's! A quality company, i'm okay, with putting a thousand dollars right into apple, but if i were to say hey, i have this new penny stock.

Do you want to invest a thousand dollars into it? You might be more concerned right. Well, you might ask a couple more questions: why? Because it comes at a greater form of risk when it's a penny stock, when you're shorting a stock, these opportunities come at a greater form of risk. So i think it's something. At least you should take into consideration before you go all in and knowing that it comes at a greater form of risk to treat it and be more selective with the stocks you choose to short, it's kind of like a secret weapon right.

It's cool that you can make money when stocks pull back, but you don't want to just do it and short every stock, because technically there are a lot of stocks that are consistently bullish. So i would hate for you to get caught on the wrong side of a short and then just end up losing or draining your trading account. So i just want to make sure that i talk about the risk behind shorting. So one of the first things that i wanted to cover is kind of going down the list and explaining the why behind this checklist, these are just certain criterias that i, like the stocks that i focus on to me before.

I choose to short them just because i want them to meet this criteria, doesn't mean that you need to show it the same way. What i want to encourage you to do is to cherry pick out of the different items i list on this checklist. You don't have to agree with all of them. You can cherry pick, the ones that you agree with and add on top of that, what you think it should mean before you choose to short something.

So the first thing that i want to start off by saying is asking yourself the question. So this is a checklist as you're about to short something asking yourself. The question: is this stock still bullish, meaning is this stock still indicating signs of an uptrend? Is the stock still making higher highs and higher lows? I want to give you a really good example of this right, so when it comes down to apple stock, apple stock on the year chart right or we can look at this on the yeah. Let's look at this on the day: chart apple stock.

This is for the past year. It's consistently bullish, it makes higher highs and higher lows. And, yes, it does pull back from time to time, just like any stock, but apple stock is very bullish. Over a grand you know period of time, so would it make sense to want to short something like apple? Well, no, not really! Right i mean you can just like you can do anything, but does it actually make sense like why try to short something that is so consistently bullish like the overall direction, is not in your favor to short, something like this well uh in comparison right.

Let's talk about um, let's see how this one's currently doing in comparison to something like. Let's look look at this on the one hour, ten frame uh again, this is just an example. It's just the stock out there. I just knew that it was a very bearish stock, so we can look at the past uh couple of days and we can see that this stock normally tends to sell off right.

It went from one dollar and 59 all the way down to one dollar, so it lost 50 of its value within a span of what two and a half weeks. Three weeks, you know that's a bearish stock. That's a stock! That's consistently selling off since it's selling off for so consistently for a big long period of time. You know i might be a little bit more inclined to want to short something like that, simply because it's more bearish meaning it's selling off, then it is bullish.

So asking yourself that very simple question: is this stock bullish? And if your answer is yes, then for me i would not want to short something that's bullish, because that means that it's indicating signs of an option. So, therefore, i would have to hold off on shorting that specific stock now another one that i might want to talk about is: is this stock confirming lower lows, meaning? Is it indicating signs of it selling off? Is this stock proactively selling up? So, let's actually go ahead and break down. Let's go ahead and break down pinterest right pinterest. On the four hour time frame has been making lower highs and lower lows.

You know it hasn't been having the best activity. This is just again an example, and this might be something that i might be more willing to short, because the direction is in my favor when shorting a bearish stock. Normally, when you go long on a stock, you wouldn't want to go long on a stock. That's consistently bearish, but now you're making money as the stock sells off.

So now it's reversing the way that you would normally think and asking yourself the question. The other way right. This stock is consistently bearish. So therefore the direction is in my favor.

To short, it right, the other thing that i like to ask myself is opportunity: cost is, is there more downside than there is upside and it's again it's the opposite way of what you normally ask yourself when you're going long on a stock. When you go long on a stock, you always want there to be more upside than downside right. You want there to be more potential to make money than to lose money, but when you're short, you make money on the way down. So then, asking yourself that question you know yeah, i could short a stock like apple, but you know: how much is it going to pull back versus how much it can gain apple's, a very bullish stock? You know: that's why opportunity cost wise.

It really doesn't make sense to short that stock, but when something like pinterest, you know i can take into consideration. Well, you know pinterest gets rejected by the moving average and looking at you know, current resistance levels and where we're at right now, if it were to sell off to previous lows, that's about a 9 downside versus a four percent upside. So you know it's a two to one ratio, meaning that i can make two percent for every one percent that i put myself at risk and at least with that opportunity cost wise depending on what it is that you're looking for. I can meet your criteria, but one thing that i always ask myself is: is there more downside than there is upside because, when shorting a stock, that would be an attractive quality? Therefore, criteria for this stock? To me, and one of the very important things that you need to take into consideration, especially if you're an absolute beginner is position size when shorting a stock.

Does it doesn't mean that, because you have a thousand dollars in your trading account that you have to short a stock with a thousand dollars that just it's mind-boggling to me that people always think when they're getting started, that they have to go all in every single Time that they take a trade uh, why not embrace the challenge? Why not understand that shorting, a stock comes at a greater form of risk, and instead of going in with a thousand dollars like you normally would, when you go long on a stock, maybe go in with fifty dollars, maybe go in with a hundred dollars manage and Mitigate that risk, because you're putting yourself in a riskier position a riskier trade shorting a stock. Maybe you approach it in a much more again risky way right, so you watch that position size and you manage it. So you, instead of taking a thousand dollar position size you go in with 50 or 100 and if it confirms and it begins to sell off, then you can always add more into your short position. Therefore, increasing your short position because you're making money while you're shorting it so therefore you're inclined to add more to your short position, because you've proved it to yourself that you were correct and it makes sense to short the stock.

But you ease into it because you understand that it comes at a greater form of risk. Let me know what you guys think about that and the last one that i need to talk about is risk management. Just like we take risk management into consideration before we go long on a stock. It is even that much more important when you short a stock every single time, at least for all of our learn plan, profit members every single time that you short a stock.

I need you to take into consideration how much money you are willing to put at risk, meaning your max dollar loss or your max percentage loss, meaning that if i go in with a hundred dollars, i don't want to lose more than ten dollars. I don't want to lose more than five dollars. This is a figure that you need to be okay with right. So when you put yourself in that position and you so when you put yourself in that position and if things go south and you end up having to manage and mitigate that risk, you're able to do so because it was planned.

I do not want you to be surprised and think that every short position is going to go according to plan and not take risk management into consideration. So i think it's only best for your future self that, if you choose to short a stock always have a max dollar loss or a max percentage loss of what you're willing to risk before you take that short position and other than that. Those are the main criteria that i like to focus on to make sure every short position meets before i choose to short a stock and just like anything right, the more comfortable you become shorting, the more experience you gain, the better you can then become, and the More aggressive, you can then begin to short, i want to remind you, you have nothing but time to learn how to trade and shorten the stock market, so why rush into it so embrace the challenge ease into it. If you choose to short but understand that it does come at a greater form of risk - and i just thought that i would do my part in breaking down on how i would as a beginner short but also take risk management into consideration.

Again, if you guys want to download this pdf, it is for free and it's that first link in the description. If you have any questions whatsoever, if you're an absolute beginner first, please make sure you subscribe to the channel. I upload new videos every single day and second, i want to encourage you to reach out to me. My instagram is down in the description and i would love the opportunity to just you know kick start a message and be of assistance for you.

So, if you've never connected with another trader, click that link message me on instagram and just introduce yourself and what your goal is and how you think i can assist you there. I really do appreciate you guys time again. I hope that we earned a thumbs up and, like always, let's make sure that we end the year on a green now. Take it easy team.