How to short a stock and make money. I give a recent trade example. Join my Facebook group called How To Make Money With Stock Alerts Services (https://www.facebook.com/groups/909972086139926/) it is an awesome community full of stock alerts service members that share tips, tricks and real experiences. (For awesome stock and options trades, check out https://sidekicktraders.com) learn how to not destroy your account in our course How to Not Blow Up Your Account (https://sidekicktraders.com/dontblowyouraccount). hi guys it's russell and i thought i'd do a quick video tonight about short selling so a few of you have been messaging me on facebook and in the discord asking about how the hell do we short a stock um so shortness talk is not a difficult thing i just wanted to go through the basics of it it's really not complicated but it can be intimidating to a new trader i remember being intimidated by it um when i started over eight years ago so the first thing i want to mention about short selling is that you do need a margin account it's because you're borrowing stock from your broker and it's highly risky because you can lose more than you invest although that's in theory and i'll go through that a little bit about how that's just not really a big a big issue but that's what people will tell you is that short in a stock is extremely risky and it's not anyway i'll just quickly go over the basic concept because it seems to confuse a few people and it is a little bit weird when you're first starting out so step one for shortener stock so basically what you're doing when you're short of stock is you're looking to make money when the price of the stock falls so that's in stark contrast to when you're buying a stock and hoping the price goes up and some people object to this from an ethical point of view saying you know like well why i don't want to bet against a company price going down that just you know i don't want to make money from a company stock but in reality short sellers actually provide a lot of value in the stock market they provide liquidity uh in the short term like in a day trader if you you know even a few weeks you're really not hurting the company uh especially if you're a very small trader like like us so there's definitely some objections to short selling but really it's not something that you know i disagree with and i think it's a great tool to add to your arsenal in the market so so your betting of the stock falls in price and uh basically what you do this is a five simple steps so the first step is you borrow the stock from your broker so your broker has a whole bunch of stocks and you can basically just say hey i want these stocks will you lend them to me for free essentially but not quite free because they do charge a small interest fee now this is negligible if you're doing an intraday trade but it can add up if you're holding it for a year and your different brokers will give you the different interest rates that they charge you for borrowing the stock from them but apart from this interest fee there's no charge associated with a broker saying hey here's 100 shares of xyz stock go ahead and sell these on the market at the market rate so for this example i just want to say okay imagine you borrow one stock from your broker for one dollar per share and you have that free now you own that and you can basically then sell that stock on the market to anybody that you want for one dollar a share because that's a gone rate well then imagine that you're right and the stock price falls and it falls a big amount 50 in this case and now that stock is worth only 50 cents a share well you sold it for to somebody for one and you can now buy that back for 50 cents so you got one dollar from them and then you spend half of a dollar so you're left with 50 or fifty cent profit in this case and then all you do is you give the stock back to your broker and pay this tiny interest fee if you held it for a long period of time so pretty simple right borrow the stock sell the stock to somebody buy it back if the price goes down and you keep the difference so basically it's not a and it's not a difficult concept uh when you sort of lay out simply like this but there's a few extra things that you might want to consider so let me go over to my brokerage account and give you an example of one of the stocks i shorted recently this guy so i'll walk you through this and then i'll explain how to place one of these short short sales so so this stock had taken this huge move up um you know from 0.7 to almost a dollar so 0.86 and usually when stocks move like this uh they'll often have a fade so this one faded down in price so what i did is on this first candle i basically said okay this move is way over cooked.