The New Sell and Sell Short: How to Take Profits, Cut Losses, and Benefit from Price Declines, Expanded Second Edition

INTRODUCTION

There is a time to grow and a time to decline. A time to plant and a time to reap.

That cute puppy bouncing up and down in your living room will someday become an old, decrepit dog whom you will have to drive to the vet’s office to put it out of its misery.

That stock you bought with such great hopes and which you enjoyed watching grow has now rolled over and is cutting into your capital instead of increasing it. It is high time to look for an exit.

Buying is fun. It grows out of hope, great expectations, a chest full of air. Selling is a hard, unsmiling business, like driving that poor old dog to the vet for its final injection. But sell you must.

And once you and I talk about selling—that essential reality at the end of every trade—we will not stop. We will talk about selling short. Amateurs don’t know how to short and are afraid of it, but professionals love shorting and profit from declines.

Stocks go down much faster than they rise, and a trader who knows how to short doubles his opportunities. But before you sell short you must learn to sell and sell well.

So let us take off those rose-colored glasses and learn to sell.