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What is shorting? Shorting or short selling stocks basically means that you are borrowing stocks from a broker and then selling them to someone else. After the price declines, you would then buy back those stocks, at a much lower price, give it back to the broker and keep the â??profitsâ? which is really the difference between selling and buying prices. It is also a technique utilized by many investors in order to make money and capitalize of the possible decline in stock prices.

Everyone knows that short selling is high risk especially when instead of going down, the stock prices actually go up! Such a thing could procure significant losses for the seller. Suppose the price for every share of the borrowed stock went up to $15 from the former $12, the seller would then have to cash in all the previously sold stocks at a price of $750, return the borrowed shares to his or her broker and at the end of it all lose $150.  

So how does one predict or forecast a decline in the price of stocks? You could use stock investing software… or One can do just that by observing the following market situations that are usual tell tale signs of a decline in the price of stocks.

The market indexes are near the prior resistance levels.
Market trends are displaying technically overbought levels.
The restlessness before an announcement of a state government.
The vulnerability of a market during trying scandals.

I know it might sound a little depressing but thatâ??s what short selling is all about, taking advantage of a decline in the stock prices in order to gain profit. One manâ??s loss is another manâ??s gain, in simpler words.