Why Shorting is different?

Whether Day Trading or Swing Trading

traders tend to take shorting as a mere opposite of going long.

This is far from reality.

Traders always seem to catch the rythm of going long but rarely that of going short!

They always find shorting much more stressful and difficult and less profitable!

Lets see why.

How much time do the markets spend in climbing and how much in falling?

Do markets climb faster or fall faster or equal?

Equal??

Think again!

Call it gravity, call it force of fear

markets fall in 40% less time than it takes to climb the same height!

or,

markets take 66% more time and effort to climb than to fall!

In other words, markets fall 60% faster!

Put in yet another way, markets keep climbing for 62% of the time and fall for the rest 38%!

You can also say - market remains in bull phase for 60% time and rest 40% in bear phase!

This is perfectly according to 5:3 Elliot Wave!

and as per 61.8% fibonacci retracement (golden ratio)!

So,

What does it mean in practical for a trader?

- Expect falls to end early.

- Estimate the duration of bear runs.

- Beware of wrong bull calls especially towards the end of the bull runs!

- Don't blindly implement bull strategies for bear phase.

- Hedge short with long carefully, if at all

and most importantly

- If the fall is less (or much less) than the rise, then the falls will be more (or much more) at a much later date to compensate for the same. The dynamic ratio will always be maintained.