How To Trade Profitability In A Bear Market

As it goes that trading in a bull market is much comfortable and lots of money making is much easier than trading in a bear market. Though making profits in bullish markets is easy going but to trade successfully or find profits in trading during bearish market is an art let me quickly give you some tips on that!

During the transition of the market from bullish to bearish, accept this fact gracefully and then make your future plans otherwise you will never be able to come out of that fright and would end up bearing losses. Shoulder the responsibility of your own trading action and do put the blame on your broker or your friend who has given you the "tips" that led to your losses.

Make sure that if you are confronted with losses from a sudden crumple in prices; admit that it is your liability to now set up action to get out of these circumstances with profits.

During bearish markets it is not advisable to buy stocks that are in initial outbreaks and just holding them and coming back again after a few days to reap profits, the way you normally do in bullish markets.

For making with profits trading with trend is the key in bullish markets, on the contrary, in bearish markets, the market freezes, and trends are "shorter" in duration or the market will go into a sideways direction, with prices fluctuate between ranges. So it is always that during bearish markets, range trading is better rather than trend trading. Adapt yourself to this quickly else you could be caught with short term trend changes and suffer whipsaws and lose money trend trading during bearish markets.

Experience of the old players of this field suggests there is no scope for careless trading during bearish markets. The margin of error for a trading signal is much lower when trading in a bearish market. In bearish markets, people are satisfied with lesser profits, but trading more often and in higher volumes. To aid in their margin of profits, they are able to negotiate the lowest brokerage terms possible with their brokers or to use low-priced online trading platforms.

So in nutshell the wise trader would profit himself by range trading by taking advantage of the shorter and quicker recoil that occur as stocks get oversold and retrace upwards.

"In this business if you're good, you're right six times out of ten. 
You're never going to be right nine times out of ten."

*-- Peter Lynch - One Up On Wall Street

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