[bovverd]

Originally Posted by raphbaph

Leeb06 has it right, in my opinion.
The problem is you need to be really, really shure that the stock will go down in the future.
When you do it Rule#1 style you might check the technical indicators (the tools) in the reverse direction.

However, I think shorting stocks is more risky, because you can only loose all of your invested money when you invest in stocks (long positions), but every stock has the theoretical possibility of growing to the sky. So you can loose much much more than what you went in with. (Shorting stocks is like borrowing money in a sense).

However shorting stocks is not a leveraged tool like npg suggested.
Its lever is 1:1 or -1:1 or whatever way you want to write it.

I used short positions a couple of times, mostly succesful, but I made shure I knew what I did, and double checked my entry and exit timing.

Did you use the tools for timing purposes?