Saturday, August 20, 2011

How to survive a bear market

from: This Blog

This is what characterizes bear markets:
  • Sellers are in control
  • Oversold often stays oversold for a long time
  • Markets drop a lot faster than they go up
  • Bear markets burn and churn accounts with long only exposure
  • Volume and liquidity can dry up but price can still drop significantly
  • ‘Cheap’ can get a lot ‘cheaper’
  • Hope is slowly destroyed
  • Vicious bear market rallies try to suck in traders to trap them
  • Expect lots of gaps to the downside
  • It takes a long time until market participants throw in the towel
This is appropriate trading behaviour during bear markets:
  • Either in cash or short
  • Sell the rallies mentality
  • Do NOT buy the dips
  • Do not even think about going long if you are not an active and experienced trader


amarjeet said...

respected sir,
please advice on hindalco.hindalco now its neckline if it breaks so horriable.i like hindalco, i am invested in it.

anshul said...

all the point fits in current situation of world and indian markets and it suggests that we r in trap of bear market

seeker said...

sir how do we know bar pyschology? Is there any books for bar psychology

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