Smart Ideas: Revisited

Ways To Maximize Profits In Bull And Bear Markets

Bear markets occur during economic recessions. They happen when the gross domestic product (GDP) is stable since unemployment dropping increase corporate profits. The demand for stocks rise in bull markets. Here is more about these terms in advance or decline line of bear and bull markets. When the line declines for several months as the averages continue to rise then it is a negative correlation. A major correction or a bear market is likely to happen when the line decline for months continuously.The bull market and bear market are opposites. The economic cycles consists of four phases. Economic recession shows a fall in prices of the stocks months ahead of GDP decline. Even though the risks are high, you can make profits in the bull and bear market. Most investors experience both bull and bear markets. You can use these methods to make money in the bull and bear market

Purchase the stocks in the bull market when prices are low and wait for prices to rise before you sell them. The strategy requires a confident investor.

You use the increased buy and hold technique that is like the buy and hold strategy. 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.

Checkout these terms about the retracement period for better understanding. Some investors buy in the bull market during the retracement periods.

Full swing trading in the bull and bear markets involves the use of short-selling and other techniques to get maximum gains as shifts occur in the bull or bear market..

The future date beyond which the seller cannot be allowed to sell the shares is called expiration date. Investor has to pay a premium for the options. A put option increases in value when the prices of the stock fall; therefore read these terms of put options.

Use a short exchange-traded fund (ETF) to trade in the bear market. 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.

The transaction costs and operating expenses are low when you use long EFTs.