My students and I profit from making money in bear and bull markets alike. Both these markets contradict each other. However through my expertise and experience, more often than not we profit on our trades regardless of the type of market.
The ‘bull market’ illustrates a market that’s on an upward trend. Someone can be described as bullish when viewing and trading on the positive trend. On the contrary a ‘bear market’ is on a downward spiral, stock prices are falling and it becomes tough for investors to acknowledge potential profitable shares. Some see this as a bear striking downwards, hence the metaphor.
Through many years in the markets and trading many shares I have gained sufficient knowledge to make profitable moves in any market condition and I share this expertise with my students in my live trading room each day.
Normally, bear markets are better for day traders. There is great profit to be made when perfectly sound companies see their stock prices fall. Getting in at the right time can make for substantial profit.
As we have seen as 2018 drew to a close, Apple’s stock tumbled some 37% resulting from various factors, mainly over negative forecasting over iPhone sales. This shows what can happen to a successful company and how it might react to fend of this negative outlook. A major stumbling block for Apple and for many other companies as well is the ongoing trade war between the US and China. A reduction in tariffs could see a renewed influx of trading and an end to legal rows regarding licensing and patent fees, which would also be beneficial to the two largest economies in the world.
I feel that 2019 has great potential for trading. There may be some real hidden gems that offer great potential for maximum profit. For instance, rumour has it that the data cruncher Cloudera (CLDR) has potential to soar 100% of its current levels. Also, the bio-pharmacy Neurocrine Biosciences (NBIX) has seen serious growth in 2018 and is rumoured to have the potential to keep soaring into 2019. I’m too old to believe rumours, but for my students and I it really doesn’t matter what the rumor is. What is important is that the rumours of high potential keep flowing into the market so that we maintain our ability to make quick, smart trades.
Bear markets can be devastating when they occur, but mainly to investors. Thankfully, for investors, bad times are much shorter than bull markets. For us, adept day traders, bear markets can be an advantage, as when markets drop, it does so fiercely. Such strong movements are when my students and I can reap the benefits of our knowledge and patience.
Bear markets illustrate many weaknesses in companies. For example, which companies have too much debt to handle. Down through the years we have learned how to see those distressed stocks out there, and wait for them to present short opportunities as their short positions grow.
Generally, in bear markets the shares of both good and bad companies will plummet, as I have learned. Traders must focus on differentiating between those are dropping because of their own reasons, versus those dropping only due to the weight of the markets.
When markets are hectic, is when being organized matters the most. A stock watchlist is a crucial and fundamental part of acquiring stocks or shares, especially in such times. It is a habit that I have consistently adhered to throughout my career. Today is no different. It is a list of stocks on which I intend to keep my eye for future opportunities. They are generally stocks that meet certain criteria of my predetermined trading strategy. I look into various attributes such as the key patterns and the volatility and price of the stock. As I always say on my live trading chat room, I almost never go for stocks under $10, and never ever under $5.
I am sure that 2019 will continue to be one of the most successful years for the students of Tradenet, who are the dearest assets we have.
Meir Barak is a day trader with over 15 years of experience and the founder of Tradenet day trading academy.
Disclaimer: This content does not necessarily represent the views of IWB.