Learning to short the market

I remembered the day when ACCICB told me that the time has come to learn how to short the market. I was like Woah exciting times that we live in indeed. He calls it being able to play both sides of the coin and was telling me how the charges are more expensive and has also updated his spreadsheet to include that function. 

I was rather chilled when he told me about it as I foresaw that this would be just one more step in his journey from investor to trader. He compares it to jumping off the cliff and all I could say was Thank God it's a long way down. Let's just hope you can get your parachute to work and who knows you may sprout some wings and take off instead. 

As with all new things, he started by paper trading first which was a constant refinement of techniques and mistakes being made and what not. Every market has its own peculiarities and since he covers so many, you can imagine how long he has been doing this. After much time, when he was confident enough he moved on to real trades but just bite sized amounts to see whether the lessons have been effective.

Personally, I doubt I ever want to move into shorting but it does make sense as I saw endless red in my watch list on and off. I do wonder about my risk attitude and risk management is all nice to say and easy to do when you know the outcomes of the risks you take. But uncertainty is what surrounds us now and then, like a mirage we were fooled into thinking that we are taking the right risks. 

The psychology of paper trading is totally different from your mindset when you do actual trades. You become more emotionally invested when you trade with real money although you are supposed to be rational so that you can make the right decision. After all, strategy is a living process and not just a mindless routine.

The key is to just move on after the trade has been done, regardless of whether it was a win or a loss. I think that yes spending some time on reflection is good but going over and over again thinking of what you can do better or should have done or not is not healthy and a total time waster. The clock is ticking and you need to use the remaining time to make $$$.

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