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How to Short a Stock - Watch Me Do It! (Day Trading For Beginners) - YouTube
Channel: ClayTrader
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hey it's clay at clay charter comm and
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in this video I'm gonna show you how to
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short a stock and what shorting a stock
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looks like within the world of online
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trading and the stock market as a whole
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before I go any further let's set up
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some context if you hear me say shorting
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the stock or going short and you think
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kind of like what I did when I got
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started it's oh so you mean a trade
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where it's gonna be very quick it's
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gonna be a very short trade you're not
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gonna be in it that long like I said
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that's exactly what I thought shorting
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meant when I got started but no there's
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no timeframe attributes associated with
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it at all timeframe and shorting has
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nothing to do with one another
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shorting at the core and actually let me
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take a step back if you're interested
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and more about how this is all working
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what's going on behind the scenes then
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if you're watching this video on YouTube
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down in the description box or if you're
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watching this at clay check on just
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right down below the video I'll link to
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another video I've done where it's just
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what is shorting you know how to
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shorting work for more of a like I said
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kind of behind the scenes perspective of
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you know how would I'm about to talk
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about and show you actually works but
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for this all I'm gonna say is right off
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the get-go and it's gonna sound bizarre
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if you've never heard of shorting before
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but shorting means that when prices go
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down so if a stock price goes down then
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you as a trader make money I'm gonna say
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that again when stock prices go down you
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as a trader make money very very odd but
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yes it's possible and again wait how is
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that even what how does that work like I
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said I'm not gonna spend my time here
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doing it because I want it like said
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let's get into the real world of trading
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and I'll show you how it works but if
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you want more than behind-the-scenes
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watch that other video down below so the
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way you short the way shorting all plays
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out is you need to actually sell first
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now the traditional mindset when you get
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into the market it's what buy low sell
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high or in other words you need to buy
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the stock and then you sell it higher
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the exact opposite is true for shorting
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you actually sell first and then you buy
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so the way it works at least in my
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platform is and this it's gonna be
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pretty much the same but all platforms a
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little bit different but in my platform
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there is no go short there's no shorting
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button you just simply have to focus on
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and you sell first you hit the his cell
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button first and that's it likes it
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other platforms might have a cell button
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and then right next to the cell button
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might have a short platform that's what
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that means is okay you're gonna try to
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make money when prices go down so that
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is how it all works and what I want to
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do here is just show you kind of how it
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fluctuates because it's very weird the
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first time you see it and especially the
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first time you do it when you're
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thinking wait a second all right yeah I
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see my I see my profits they're going up
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but the price is going down this is this
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is just weird and it is weird and my
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goal here is this video is maybe to kind
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of alleviate some of the weirdness when
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you do it because your eyes will be used
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to actually seeing how it plays out so
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like I said let's just and like I said
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this is actual this is my trading
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platform I'm done for the day and I want
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to get this video done so what I'm gonna
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do here is first off let's just say and
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let's set up a story so here I am I'm
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looking at this stock this stock being
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18 t I think most people have heard 18 T
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ticker symbol T and I'm just looking at
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it I'm saying you know what I think this
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thing wants to go down in value now
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because I think it wants go down in
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value that means I want to what I want
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to short this stock because I think the
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price I think the stocks value is going
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down I think it's headed in this
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direction okay now in all actuality I'm
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not saying this is like some sort of
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shorting pattern that's not what I'm
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saying at all my point here is just to
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kind of walk you through the thought
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process of what it was what you would do
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if you wanted to short a stock so pull
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up 18 T I determine using my strategy
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using you know the tools whatever tools
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you want to use but somehow you arrive
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at the conclusion that know what I think
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18 T is gonna go down in value
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next thing is alright well how many
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shares do I want to short so down here
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just because this is example saying I'm
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gonna short 10 shares I want to short 10
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shares of 18 team what price do I want
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to short am at let's say you know what I
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want to sell those at 3489 okay so I'm
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lining to sell so that's what I'm to hit
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first 10 shares of 18 T ticker symbol T
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434 89
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and in order to do this like I said I'm
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gonna have to hit the cell button first
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now before I hit the cell button
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pay attention down here because this is
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where it's gonna show up and after it
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shows up at that point watch this area
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right here because that's gonna start to
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fluctuate you're gonna see colors change
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red means I'm losing money on the
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position green means I'm making money on
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the position now I don't know how that's
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gonna play out
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because I don't know what's gonna happen
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here but for this point now given the
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prices started to go back up let just
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say you know what I'm willing to short
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I'm willing to go short at 30 496 up
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here you can see the prices of the stock
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so yoots
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35 we're not straight strapped and so
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it's moving relatively quick but these
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are the couple prices this is called
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level twos if you've never if you're not
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familiar what this is so that's level
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twos over there in you know trading tool
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jargon but I'm gonna go ahead and say
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you know I want a short at 30 496 so
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watch down here I'm gonna hit the sell
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button and then watch again over here
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and you'll see the position show up
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so let's hit sell hope I missed it all
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right let's try again
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there we go so what is this telling us
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now well at this point I am short ticker
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symbol 18 T and see the negative sign
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you're gonna have to look very close but
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there is a negative sign in front of the
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10 meaning I am short and the other
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thing though keep in mind is that number
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right there see the negative 50 cents
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that means I'm losing money oh now I'm
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losing more money why am i losing money
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because look here that the price is
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actually going up which is bizarre
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right now I'm losing more money I'm down
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90 cents again why am i losing money
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right now because the price is going up
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very very odd isn't it to sit there and
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like all right claig the stock is going
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up oh but you're losing money what
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that's how shorting works is you want to
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see the prices go down but but if you're
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wrong which as of right now within this
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context of things I am wrong because I'm
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wrong and the price of the price is
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going up guess what I am losing money
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which in just continue to watch that
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watch that the higher the price goes so
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the higher these numbers over it now is
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it's poor choice of colors or let's try
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that again the higher these numbers go
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over here the big outlook now I'm down a
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dollar 30 I
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losing $1 $30 40 why because over here
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the price is going up now if you're
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totally new IV this is called a
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technical chart over here and these are
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called candlesticks so no it's not the
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matrix or anything like that but that is
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exactly what's going on now what is
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gonna take for this number to go down so
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now it's see my loss is decreasing now
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I'm only losing a dollar is let's see if
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the price goes back down and if it goes
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back down well this number is going to
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continue to get smaller and smaller but
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as it right now
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I am losing a dollar nom down a dollar
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60 because the price is continuing to go
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up now I'm down a dollar 80
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isn't that weird though I mean you would
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think the traditional sense buy low sell
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high yeah yeah alright go price go price
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go but in this situation I would be
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thinking and you know whining the price
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to actually roll right back over so I'm
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trying to stall right now I'd like to
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see it pull back some just so we can see
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that number shrink
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ideally maybe down below a dollar or who
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knows maybe I'll get the example where
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that goes up to two dollars and then
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three dollars because this thing just
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keeps going up and up and up which would
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you know so right now I'm lost two
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dollars because I got short meaning I
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sold my shares at 34 94 but because the
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price is now at 35 again with the color
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clay I apologize for that but because
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now the prices at 35 1035 11 35 13 that
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is why that number keeps on changing and
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getting bigger in the direction that I
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don't want to see it get I want to see
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this number green that would mean I'm
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making money but because this thing's
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keeps on moving higher and higher my
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loss keeps on getting bigger and bigger
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so what I'll do is I'm gonna go ahead
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and pause and I'll see if this does
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ultimately roll back over here a little
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bit to see that if we can watch that
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number maybe start to shrink and then
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you can see the exact opposite but yeah
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right now this thing is essentially just
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going straight up so I'll let it roll it
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but so again it's getting higher
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watch the prices the higher that number
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goes so the higher the value of the
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stock rises the more and more I am going
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to lose money and that is how shorting
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works that's what it looks like you want
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to see the values go down in this
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situation it's not going down there we
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go to 90 is it gonna am I gonna go to
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three dollars on the three dollars I'm
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down three ten now had I quote unquote
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gone long which is the traditional way
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of trading meaning you buy first and
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then you sell well I'd be making all
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kinds of money this would be a great
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trade right now but in this in this
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quote-unquote story yeah I chose poorly
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I thought the price was going down and
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that's not what's happening all right I
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paused for a little bit but now we're
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approaching maybe even being down four
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dollars and there it is now I am down
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four to four dollars and ten cents look
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at this move I chose very very poorly
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right as the short sighted trader this
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is what we call the House of Pain right
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now four dollars and thirty cents for 40
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I mean this is kind of fun let's see if
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we can get this up to five dollars wow
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this is good stuff and my voice cracked
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can somebody tell me why I'm getting
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hair under my armpits I don't quite why
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is my voice changing what's going on
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with my body
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anyway it's nevermind for 64-54 four
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alright there we go so what I'm still
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trying to catch here is let's just see
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the price come down a little bit and if
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the price comes down that number is
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going to shrink but I has it right now
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this thing is just completely going
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straight up but that is how it all works
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and you you've seen it drop so if we
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start to see some red as these are
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called candlesticks here red meaning the
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price is pulling back then that number
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will start to shrink so there we go see
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the how this is turning red but now this
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number is actually shrinking well that
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is because I am now starting to get the
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price to go in the direction that I want
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it to go so at the core as it plays out
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I just want to really hammer this home
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because I do realize when you are just
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getting started in your brand new to the
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stock market into day trading and just
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trading as a whole this is a very wrong
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am I going to get there it is five
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dollars five forty five seventy Wow this
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is what is known as the house of
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from the short side now think about it
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how high can a price rise a price can
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rise theoretically forever so that is
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why when you go short you need to be
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maximum or you need to be at maximum you
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kind of fold go in the risk management
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department you need be disciplined
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because in theory this could go up
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forever meaning my losses are
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potentially unlimited whereas when you
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buy what's the lowest the stock price
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can go what can go to $0 but when things
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are short it or when you are shorting
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prices can theoretically go up and up
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and up forever meaning your losses in
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theory are unlimited
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now there's things caught and I'm not
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going to go down that rabbit hole but
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there's things called margin calls so it
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would never get to that point but the
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idea here is that Wow
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almost that's seven dollars whew I got
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this look at this thing I've never been
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so happy to take a loss but this is a
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really good example of what you don't
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want to see happen when you go short the
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price is going up but again if I was
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long if I had bought first well then
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this would be a green number right here
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and I'd be rejoicing but in this
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situation I'm in the House of Pain now
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from this short side of things so given
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that I'm watching this and I'm getting
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crushed and things are there we go waltz
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alright so notice the red candle so a
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red candle is forming and no notice that
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number now well it was starting to drop
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in value I really want to this would be
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the perfect case study video if this
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thing could just go down but no I just
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wants to keep going up and up I mean
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this is truly getting crushed I'm
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potentially gonna be down $1 per share
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me meaning I got this thing way wrong
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way wrong now looking like I said like
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that's why I offered up a disclosure I
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was not saying that this was some sort
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of pattern that you should have went
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short I just randomly went short at a
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spot but so let's just say now I'm
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trying to stall and this thing just
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doesn't want to pull back so I'll just
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wrap things up because you get the idea
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you see even seeing that voice kind of
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or the voice of the price drop down a
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little bit but let's say you're like
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alright I need to I need this I needed
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to stop the losses I want to stop losing
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money or
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the words I want to exit the trade so
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how do I exit the trade well remember
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back how did I enter the trade I needed
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to click the sell button first because
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that's how shorting works you sell first
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but now that I want to exit the trade
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you need to buy so that is where whoops
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not right there that is where I'm going
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to come down here now and click buy and
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just admit defeat admit the fact that
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this is getting way out of control
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I'm losing a lot of money so I want to
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get out so the way to do that and let's
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just say because I'm willing to I'm
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willing and want to get out at any price
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I'm gonna just change this over to
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what's known as a market order and I'm
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just gonna go down here
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well now looking like the price might
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want to move down here a little bit so
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let's watch let's see if we can get this
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at least down below $7 there we go
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kind of again if you see the red candles
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over here form you're gonna see this
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number drop and drop and drop so can we
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get this to pull back just a little bit
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more to bring my losses down below $7
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that's really the key question right now
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so let's see how this plays out again I
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we want to see this number get low they
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heard hiss with you we want to see this
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number get as low as possible the lower
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that number goes the less my loss is
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going to become there we go
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going down going down now we're look
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we're down below what we were down below
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$7 let's see if that number can move
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further and further to the downside
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direction
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there we go look down below $7 now so
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this is weird right I'm actually happy
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now that I'm seeing right I'm happy that
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the price is going down now it's
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dropping even more now we're down below
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6 excellent again red candle the price
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is going down so finally this number
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here the loss is getting smaller and
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smaller now if it dropped down far
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enough and eventually that number would
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turn green but I it's gonna take a major
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crash at this point for that number to
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ever go green but let's just say all
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right wow I was down over $7 now I'm
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only down you know five dollars and ten
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cents maybe I can even now I'm less than
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$5 so I'm gonna go ahead and buy so
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there we are so I hit the Buy button and
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you can see here that the position has
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been locked in so over here it actually
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shows that I sold and then bought back
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for a loss of four dollars and ninety
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cents now remember that I couldn't have
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drawn this up any better so that number
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was a whole lot more when the price was
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up here but because the price did come
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down my loss was ultimately being you
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know was able to be minimized but again
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just to really reiterate that well as
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now and should have could have would I
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should have held longer because that
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loss would have gotten even smaller but
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if the price theoretically goes down far
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enough far enough far enough then that
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number would have eventually changed
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green and it would have been a
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profitable trade but that is how
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shorting works that is how you go short
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you sell first and then to exit as I
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just showed you you have to buy and
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that's how it all works
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bizarre crazy and and I realize
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hopefully this helps you out a little
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bit but I assure you I promise you the
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first time you ever go short it is I
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don't even know how to explain nothing
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you just kind of have to experience
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yourself it's almost like a euphoric
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feeling it feels like you're in the bar
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sorrow world where you're in and you're
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saying go down price yes the price is
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going down and it's like I said very
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very odd but that is how it works
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so hopefully this video helped you out
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and if you enjoy the video then please
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hit that like button and leave me a
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comment down below have you ever gone
[1031]
short before or let me know maybe this
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is the first time you've heard about
[1035]
going short and maybe you're one of
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those people like I was I thought going
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short meant oh so that
[1039]
is gonna be a quick trade it's gonna be
[1040]
a very short amount of time like I said
[1042]
no shame there that is exactly what I
[1044]
thought when I got started so let me
[1046]
know down in the comment section below
[1047]
or if you just have any more suggestions
[1048]
for videos like this I'll but if nothing
[1050]
else and you would like for me to
[1051]
continue to make these the easiest way
[1053]
to communicate that to me it's just to
[1055]
quickly hit that like button and then
[1056]
hopefully you ultimately decide to
[1058]
subscribe to the channel if you want to
[1059]
see more of going short then I have lots
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of what I call the live trade videos on
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the channel and lots of times I am going
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short so you'll see this exact thing and
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you'll see now the numbers will be
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bigger because I'm going short with more
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than 10 shares but you'll see this exact
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dynamic going on and one of the comments
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I get quite a bit on those live chat
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abusers I'm so confused clay why do you
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want the price to go down but now at
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this point I officially have a video
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that I can link people to so they can
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see how this all works out in the real
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world so like I said hit that like
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button leave a comment down below
[1090]
subscribe to the channel thanks for
[1092]
hanging out first off thanks so much for
[1094]
watching the entire video real quick
[1096]
before you go I want to invite you to a
[1098]
live webinar web class training workshop
[1101]
online event whatever you want to call
[1103]
it but it will be me live revealing to
[1106]
you what I discovered that has allowed
[1107]
me to transform myself from being an
[1110]
employee to being my own boss
[1112]
including how I had only one losing day
[1115]
out of 73 days in total I'm going to
[1117]
cover three keys that have helped me
[1119]
unlock profitable consistency within the
[1122]
markets the first key is super-weird but
[1124]
in a productive type of way the second
[1126]
key is super awesome because it quite
[1128]
literally is wired into our DNA as
[1130]
humans making it very easy to use but in
[1133]
a cruel way this becomes a pitfall for
[1136]
many traders I'll explain it all though
[1138]
including how to avoid the pitfall that
[1140]
it creates for some and yeah the third
[1142]
key when you hear it sounds way to get
[1144]
way too good to be true but it's not and
[1146]
I'll show you how it all works then at
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the end I open it up for a
[1150]
question-and-answer session that is
[1151]
again totally live even if you can't
[1154]
make the live session please still sign
[1156]
up as it will be recorded and you can go
[1158]
back and watch the replay then I will
[1160]
send you click the image on the screen
[1162]
or click the link down in the
[1163]
description box so you can get the date
[1165]
and time
[1166]
and claim your spot which I should know
[1168]
is limited due to the fact that this
[1170]
truly is a live event if you have any
[1173]
questions let me know if not I'll be
[1175]
seeing you soon
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