Features bear hunting


That's the peace and is one of the difficulties of trading in a bearish market. Traders, bred and trained by strong movements, able to use <time>, is often lost in the ever-slow motion. They lack guidance, signals and often simply appropriate atmosphere seething life, which consists in a bull market, regardless of its momentary direction.

Bear market and deytreyding

As for day trading, no one knows what traders will do in a real bear market - because its time for them just was not right. But some things we still can not make any predictions. First, the profession of day traders, it widely became possible only due to the volatility of today's bull market. And one of the main features of a true bear market is the almost complete lack of volatility. Instead, we have a gradual <washout> prices. Traders familiar with the idea <deadband>. This time period is somewhere between 12 and 14 hours, when the market falls sharply volatility - many traders go to dinner, the big players are taking a break. Everyone knows how difficult it is to trade in this period when almost every move is either false, or short-lived and weak in amplitude. Now imagine the weeks and months ahead of the market ... and with no sudden dips prices. Therefore, the trader and in the fall to play not with his hands - too slowly everything moves.

In this situation it is not surprising that the real bear market is a very <depressed>. When traders are experiencing depression - they make mistakes.

Some more features of day trading in a bearish market. In a slow and steady decline in the value of the securities investor pessimism covers, and they begin to leave the stock market. This mood is transmitted to all financial institutions - the major players in the market. Institutions fail to support the securities. In the securities no longer support levels. And without the support levels trader is extremely difficult. After all, traditional psychology said to him: <This paper falls. Now she felt <bottom> and you will have to buy it>. And in fact, the paper slowly slides down, never stopping long enough.

As a result, the trader stops trying to buy at the bottom and decides to go short. But its traditional psychology again prevented him, saying, <short position should be opened on the rise, when it became clear inability to reverse the downward trend bull>.

A paper will slide down, and no lifts, even the most insignificant, are observed. In this paper for a very long time can remain at their historic lows. In such circumstances, is not at all traders have the courage to go short. But you also need to a lot of patience to wait for a little bit reasonable profit. In addition to levels of support will fade or lose its strength, many technical indicators that are used to use the Day Trader. So, overbought / oversold indicators (various Stochastics,% R, etc.) will be most of the time in the areas of their extreme values, just confusing. At the forefront indicators related to volatility, as investors will always go through the market, looking for tools even with some movement.