Features bear hunting


Some strategies bear market

From the above, we can safely draw the conclusion that the market, which we have now (and which is rightly blamed for the lack of a clear trend, chaotic and passive) - it's flowers. And the berries are waiting for us after the onset of the bear market. Then, according to conservative estimates, the market will miss 50 to 75% of active traders.

And if you do not want to be in that number, you should be prepared in advance, the more so that now we often find ourselves in the market, rather looks like a bear. So, what can a trader to survive a bear market?

1. Learn to trade in markets that are not related to the low volatility of the market shares. To those, for example, is the futures market. As soon as the stock market falls appeal to speculators, they begin to transfer their assets to the futures market. That, of course, become more volatile and potentially profitable. Nor can coexist with almost fixed market shares. It is very well possible to observe, compare, for example, the behavior of NASDAQ 100 futures and stocks Sun Microsystems (SUNW). Please note that the volatility of futures almost always higher volatility stocks.

2. Learn how to trade options. In a bear market options are attractive primarily because they have become much more predictable - because their basic tools vary smoothly and slowly. Additionally options trading can use longer time intervals and thus accumulate more profits. It should be noted, many traders avoid options, considering them too complex <math>. This is largely true because stock options are often used by portfolio investors to hedge their positions in securities. But I think the arrival of day traders on the options market will be difficult not only for them. After all, they are likely to change the behavior itself options market and quickly learn how to use the error and slowness of portfolio investors. It is possible that this history will repeat traders that profit is literally <pockets> large brokers.

3. Change the time interval of their trade. In a bear market scalpers do nothing. If previously they could easily produce 50 trades per day, here they will not work. Not surprising at this rate of trade transaction takes on average about 1-2 minutes. During this time the bear market and not move. Therefore it is necessary to move to a smaller number of transactions, trying to get the most out of each.

In such a situation is extremely increases the cost of failure, because the opportunities for the sale / purchase is not much. We must learn from the sniper accuracy to enter the market at an optimal time with optimal position size. In other words, the bear market will require more skilled and more professional traders. In addition, they will need the techniques of portfolio investors. Due to the low volatility traders will speculate much larger lots than now. And they will have to learn not only a flash place orders at the best price, but also patiently accumulating a winning position using the smallest price rollbacks and waste during the day.

So, in a bear market need strategies that put a temporary erosion of prices as low as possible capital and still maintain high profit potential. Add to them the psychological stability, willingness to wait patiently for his chance, and even more patience to wait for profits - and you are not afraid of even the bear market.