Short selling as a technique is commonly used to profit from a falling or 'bear' share price.

The stock market does not always go up. There are periods when most stocks on the stock market are making lower troughs. These periods are known as bear markets.

There is no exact definition of a bear market; it will vary between market participants. An investor may class a bear market, as a 2-year period of overall downward movement.

Whereas a medium term trader may consider 3 months of downward movement as a bear market.

A bear market may occur in a select group of stocks, such in the same industry sector. A more severe bear market may occur across all stocks on a particular stock exchange.

Trading an upward move in a share price is called going 'long'. A long position is simply when a stock is bought with the objective of selling it at a higher price. Profiting from a downward move on a stock is referred to as a 'short' position. A short position is when a stock is sold (without owning it) with the objective of buying it back at a lower price.

By trading both the long and short side of the market you can obtain much better consistency in your trading. When the market is generally bullish your long trading system will perform well and when the market is generally bearish your short trading system will perform well. The end result is consistent returns, regardless of market conditions. Shorting a stock can be achieved in a number of ways:

* Short selling the physical share
* Selling CFD