Which is the more risky stock market investment, selling short or traditional long positions?

Which is more risky right now? Which is more risky in a bull market? Which is more risky in a bear market?

In general, selling short is the riskier investment. Selling short means you're betting that the price of a particular stock will drop by selling shares today that you don't already possess and having to buy sometime later to account for these shares. Lets assume you short one share of a stock today at $20. Even if the stock drops to zero (theoretically) and you buy back the share immediately, then you made $20 in profit, which is the max you can profit. However, theoretically, the stock could rise to any price, and thus your loss could be really high. So lets say it rises to $200 and you're forced to buy, then you've lost $180!

Buying long positions mean you buy a stock and keep it for long term, hoping the price will rise. Lets say you buy a stock at $20. The MOST you can lose is $20. Whereas the gain theoretically can be infinite.

Because of the above two examples, your potential loss can be much greater with short positions, and thus is more risky. In a bull market, short positions are extremely risky, because a bull market means positive gains for stocks while you're hoping for drops. In a bear market, it's the opposite, as long positions are more risky, because a bear market means negative gains for stocks while you're hoping for rises. However, long term investors don't really worry too much about dips in the market. They're banking over many years that a well-run company's stock price will increase over time, which the market has shown historically over and over again.

Selling short can be profitable, but requires lots of attention, as market timing is more critical, and you must be disciplined in knowing when to cover your positions. Due to the potentially high loss and timing factors, short positions are definitely more risky.

Good luck!

Mathematically, shorts are riskier because your risk of loss in unlimited. In practice that does not matter if you are watching the store at all.

Shorts historically move faster than longs so the opportunity for profit is greater if you are an agile trader and stay on top of things.

As far as the "market right now" situation, I consider each stock individually. My charting system will plot one of the averages, like the DJI, on top of any individual stock chart. Mostly, it hard to believe they come from the same planet. Some correlation, but mostly not. I try not to watch the averages or the "market". Go for the individuals.

Over the long term stocks tend to go up rather than down, so in the overall sense shorting is riskier than holding long positions. Also your overall potential gain is capped with a short while your potential loss is infinite (while this is a theoretical concern for a lot of investors, making a more than 100% profit on an investment is nice). Also you don't get dividends off of a short position.

Over short periods of time I doubt that one strategy is particularly more dangerous than the other (but that's just a guess--you can probably find some academic paper on this somewhere if you did deep enough). And I'm not really sure where the market is headed at the moment.

Selling short is more risky, traditional long positions are a safer bet.
More risky now is playing in the market without financial strength. More risky in the bull market is obviously going shortand vice versa in a bear market.