Short Stack Strategy
A short stack strategy in Texas Hold'em isn't usually going to be advisable. The exception to this rule will arise when you don't really have a choice. For example, if your stack in a tournament has taken a beating, or even if it's simply late in the event, you'll be forced to maneuver a short stack. If you are in a cash game and are playing with a short stack, however, it will be much more profitable to instead learn how to play with the normal 100 bb or 200 bb.
Types of Short Stackers
There are a handful of different types of short stackers in cash games. The most common form of short stacker is the total amateur who just doesn't know any better. This is the type of player that you want to be facing as they are the most likely to donate their chips without putting up much of a fight. While it's obviously much better to stack a player when they have a more sizable amount of money, it's hard to argue against the idea of playing against very weak players for easy money.
The next type of short stacker is the player who started with a full stack and has now been reduced to a short stack. These players can fall at any end of the skill spectrum, but the majority will be somewhere in the middle. Any strong player will know that it makes most sense to re buy to the max whenever possible, so you can usually discount a strong skill set.
A lot of casual players who are decent, but not great at poker will buy in for the max and just let their chips bleed off until they either double/triple/quadruple up or instead go bust. The weird thing about these players is that they will often times re buy for the table maximum when they finally do go broke. Again, this type of approach is usually indicative of a very mediocre player.
The third and final type of short stacker is the professional. Use the word professional with extreme caution, however, as no true poker professional with legitimate skills will be required to reduce themselves to short stacking. The most skillful short stackers are going to be found online, because this is the environment that best lends itself to profit. Short stacking in live play just doesn't tend to work, because its profitability relies on significant volume.
If you are playing 30 hands an hour live vs. 600-1000 hands an hour online, the difference is quite dramatic, even when you compensate for the difference in skill level. Professional short stackers will apply a very systematic approach to their game. They know what spots they are looking for and tend to be in push or fold mode almost all of the time. While they can be steady winners, these players aren't that difficult to exploit either.
Short Stacking Tournaments
In tournament (and sit and go) play, you are going to be working with a short stack from time to time. Barring an opportunity to re buy, you'll have no choice but to attempt to build it back up to its once healthy state. One thing that many players do in this position is panic. They will lose all regard for time and place and will start making spastic plays. The most common reason for this type of play with a short stack is frustration. Since a short stack means the player has lost a lot of chips, and losing a lot of chips tends to induce tilt, it all goes hand in hand.
Instead of getting all upset and reacting instinctively, take a step back and reassess your situation. If you are in absolute dire straits, it's perfectly fine to shove on the next hand. It doesn't make much sense to hand select if you have one big blind left as you are as good as dead already. If you have 10 big blinds or so, however, you should still play to win. A lot of your opponents will discount you altogether and will call off your shoves with awfully light ranges (as they should).
The best way to exploit this is to wait for above average spots where you can shove. Never flat call bets or make raises for less than all of your stack. Aside from your chip stack not giving you room to play post-flop, you should attempt to capitalize on the little bit of fold equity that you do have.
Short stacking in tournaments is no more complex than understanding that you have two options: shoving or folding, and that you need to still hand select a bit above average hands so that you can get your money in with better than a coin flip. Of course, sometimes this plan will flame out, but it's what you should have in mind if the opportunity should arise where you can put it into play.
Short Stacking Cash Games
For all intents and purposes, you are going to be playing out the 60/40 scenario on repeat. The problem is that your 20% edge can take a long time to balance itself out. As was the case with tournament short stacking, cash game short stackers will also be playing a push/fold game. There's a very systematic approach to how to best use this strategy depending upon your game of choice, and this would take several pages to cover. In the end, though, your most profitable plan is to not short stack at all.
If you learn how to play with a normal sized or deep stack, you'll make a lot more money in the long run. Short stacking is nothing more than the easy way out for those who don't want to actually become good at poker.