How To Make Profits In Bull And Bear Market.
Bear markets occur during economic recessions. Bull markets take place when the economy is strong. The demand for stocks rise in bull markets. Find out the advance or decline line in the market and these terms on decline line. A declining line shows correction during a period when markets continue to rise. If the line rises for several months and the averages have moved down it is a positive divergence that shows that there is a start of a bull market. Falling prices characterize the bear market while the bear market shows rising prices. The phases of economic cycles are expansion, peak, contraction, and trough. Economic recession shows a fall in prices of the stocks months ahead of GDP decline. There are opportunities to make profits in the bear market. Most investors experience both bull and bear markets. There are several strategies for making profits in the bear and bull market.
Buy and hold strategy in the bull market if profitable because the investor buys the stocks at low prices and sell them at when prices rise. The strategy requires a confident investor.
Some will go for increased purchase and hold because it is almost the same as buy and hold. You face additional risk when you use increased buy and hold instead of buying and holding. The investor observes the rate of increase of the price of their stocks but instead of selling like in the buy and hold they continue buying as they wait for prices to shoot higher for them to sell.
An investor in the bull market can use retracement additions; hence learn these terms about retracement. Those who buy in the retracement period assuming that the price of the shares in question will quickly resume increasing soon.
Find out the meaning of more of these terms associated with full swing trading..
The future date beyond which the seller cannot be allowed to sell the shares is called expiration date. You will be charged a premium in the bear market for the put options. You can sell the stock or the put option at a profit in the bear market if the stock prices fall below the put option.
The short EFT is also called inverse EFT in the bear market, and you can learn these terms about short EFTs. The inverse relationship makes inverse ETFs appropriate for investors who aspire to make a profit in the bear market.
You buy the stocks at a low price and sell them at a higher price.
Long ETFs can be used instead of short EFTs.