Get used to go short

Shorting a market apparently doesn’t come natural.  Maybe is the influence from the investment world, where shorting a stock is perceived almost anti-American (see here, here, and here or my favorite, listen to the lady in this video — around min 18:00) or evil.  Or maybe if the fact that it evokes a negative expectation for the future, which again, is tantamount as being anti-American…  However, when you trade anything, not just commodities, you are always buying or selling something.  If I want to pay less for gasoline to put in my car, I’m hoping for lower prices while Shell hopes for higher prices.   Kellogg want to buy cereal at lower prices, while the farmer wants them higher.  Commodities are not stocks or bonds.  Commodities aren’t expected to always rise in value and the nature of their contracts (i.e., they expire!) forces participants to always buy and sell.  While the global commodity market isn’t a zero-sum game, the section of that market that plays out in the futures market is.  There is always a buyer and seller or there is no market.  One wins and one loses.

Since there is always a buyer and seller, get used to being neutral about which one you are going to be.  It took me a while to get used to it, especially because I was a financial advisor before and they are the last people to short anything.  When I entered a trade I wanted to say that I “bought something”… or “invested in something” but the reality is that there is money to be made on both sides of the trade and if you don’t get used to it, you’ll loose on half of the trading opportunities available!!!

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