Don’t waste your time – keep track of how NFP affects the US dollar!
The ASIC policy prohibits us from providing services to clients in your region. Are you already registered with FBS and want to continue working in your Personal area?Personal area
The financial market, just like any other market, is working because someone wants to buy something, and someone wants to sell it. But in food or goods markets you can only sell things you own. The same goes for most of the brokers, you can’t sell what you don’t have. And why would you even need this? From this article, you will know, how to earn, when others lose, and how to become a bear. Now you will learn to short sell!
How’s that even possible to sell something you don’t have? Well, some brokers, like FBS, allow you to use your deposit like you have assets instead of them. To make things clear, let’s go through the short-selling process step-by-step.
So once again: you goal is as usual to buy low and sell high, but with short selling you do it in reverse order: firstly sell and then buy.
There are several reasons for you to consider short-selling stocks. The first and the most important is that no asset grows forever. The economy has cycles and at some point, there won’t be any growth in shares. With weak indices and the understanding of future downtrend movement why not short sell?
Another reason for short-selling is a hedge of your risks. Let’s say, for example, that you have enough opened long trades, and you think that markets will rise in a month or two. But also, you think that some plunge may occur in the next hours. It’s much wiser to short sell rather than close your long position and re-enter lower because trading is a probability game, and the price may surge against your forecasts.
Note that short selling is different from regular investing because you need to have access to leverage and margin trading if you want to short sell. Investing can be done without any leverage, thus, there are no risks that your position gets closed automatically when margin levels are critically low.
If the investor bought one Alcoa share at $51.5, the maximum they could lose is $51.5 because the stock cannot drop to less than $0. In other words, the maximum value that any stock can fall to is $0. If an investor shorts a stock, there is technically no limit to the amount that they could lose because the stock can continue to go up in value indefinitely. In some cases, investors could even end up owing their brokerage money. Good for you, FBS will never act like this. Control your risks and you will never see a loss of the whole deposit at once.
While short selling does present investors with an opportunity to make profits in a declining or neutral market, it should only be attempted by sophisticated investors and advanced traders due to its risk of infinite losses. Short selling is not a strategy used by many investors largely because the expectation is that stocks will rise in value. The stock market, in the long run, tends to go up although it certainly has its periods where stocks go down.
To sum up, it’s amazing to have means that allow you to earn money on every movement in the market. This way volatility is the thing that matters the most. The only thing you will need is to predict the future price movement. But be aware of risks and always maintain sufficient funds in your account, or the broker will have to close your position automatically. The history remembers cases of Short Squeezes (an article about them will be released shortly), events when the price of the stock skyrockets because of the unusually high interest for the stock and an enormous number of short-sellers, that are closing their positions in awe of horrific losses.
This article describes the strategy known as ‘Method Jarroo’. It is based on the concept of price action but with some unique features. Are you interested? Then, let’s explore this strategy!
What were the best-performing stocks in November 2021? Which stocks to trade in December? Jump in to know!
Every trader knows that economic data have a great impact on the Forex market.
Some traders try to prove technical analysis to be wrong and unprofitable. But we want to show you the Ross Hook, the pattern, that is proven to be profitable for 32 years already.
Do you remember the growth of Tesla stock in 2020? Or how about GameStop soaring 10 times in mere weeks? This is neither an “organic growth” nor a market manipulation. These events are called “Short squeezes” and I will show you how to find one and earn on it!
Apple, your favorite phone maker and one of the biggest tech companies, which capitalization has recently reached $3 trillion, will post its earnings today at 23:30 GMT+2.
For a long time, US Federal Reserve printed trillions of dollars to support the economy. But in the light of the highest inflation in almost 40 years, the stream of stimulus tends to shrink.
What is happening? In December 2021, the main question on global markets was: “When will the FED increase the key rate?” Traders and investors were transferring their capitals into USDs, waiting for the great dump worldwide…