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What is a bearish market

The bearish market condition is when the stocks of 9 out of 10 sectors see a continuous downtrend. (9 out of 10 is just for reference, not to scale). The bearish market is something that almost every trader is afraid of. Almost every trader, but not every trader. The learned traders know how to make money in such cases as well. Short selling is one of the best-known techniques to earn in a bearish market.

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What is a bearish market

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  1. Whatisabearishmarket? The bearish market condition iswhen the stocksof9 outof10sectors seeacontinuous downtrend. (9out of 10isjustfor reference, nottoscale).The bearishmarket is somethingthatalmostevery trader isafraidof.Almosteverytrader,butnoteverytrader. Thelearnedtradersknow howtomake money in such casesaswell.Shortsellingisone ofthe best-knowntechniques toearninabearishmarket. Need a real-life example? Go watchtheBigShort.ChristianBale playsthelead ofa physicianwhohadahobby to monitorthe markets.Thedoctorrealisesthatthemarket isabouttocrash andgoes shortonafallingmarket that seemsto beflourishing andso muchthatthe housing market wasdrivingtheeconomyof the USA. Thepredictions of thedoctorcametrue, andthe marketsdidfall.Nevertheless,the character thatwasportrayedby thebrilliantactor Bale mademorethan$3Billionatthat time. Theimportantthingto remember hereisthatthedoctorwasstronginhispredictions; he usedprecisemathematicsand calculatedalmostevery risk. So this was an example of how the markets fall and how people make money off of it. But making money in such a situation is never an easy task. So let us understand more aboutthe bearishmarketsand howtomake moneyinthebearishmarkets. How longdobearishmarkets last?

  2. While thebearishandbullishmarketsarehighlysubjective interms ofthe asset thatis being tradedandmight lastaccordingto theeconomicconditionsthat assetis awitness to, the average lengthofa bearish market isslightlymorethan nine months. Thebull runs aresignificantlyhigher,lastinguptothree years sometimes. Thisisanideaofabearishmarketthatistrackedoveranindex.Tokeepthepicture clear, indices(plural for an index) trackthetotaleconomic developmentofacountry. There maybe caseswhere aparticular assetmightseeabearish trendandthe time- lapsefor the sameissubjective to the economic conditionsaroundthatparticularsector only. If the trader isunaware of thesituationsthatare goingon in themarket,thenhe or she can sufferfroma visionthatcan seenothingbutbeartrends.Themarket hasto be studiedextensivelybeforemakingany move.Withoutthat,almostany andall capitalcan die. Whataresome marketconditionsthatmightlooklikea bearishtrend butaren’t? There areascertainableeventsinthemarketthatmighttriggerthetrader to thinkthatit is the beginningofabearish trend,butthatisnotnecessarilythecase.Letuslookat some exampleswhere themarketisjustbeingits regular self andnotturninginto a bear. MarketRetracement: The technicalindicatorscanhelpatrader indefiningaretracementfromatrend. Retracementisjustaregular marketprocessthatitundergoes,and thereisnothingthat shouldconcernthe trader of it.Ofcourse,therecanbetimeswhentheretracementgets bigger andcamouflagesadowntrendbutyetagain,listen to theindicatorsmorethan youlistentothe gut. Reversals: These are the instanceswherethe marketjuststarts runningoppositeto whatitwasa momentago.Reversalscanhappenbothways,an uptrendcanbecomeadowntrend, andadowntrendcan become anuptrend.Lookoutfor reversalsviaspecificcandlestick patternsliketriplebottoms. Correction: Every stockhasametric calledthe52weekhigh.A 10%orlessdecline in thismetric is called acorrection,andithappens everynowandthen.Soagain,lookoutfor specific candlestickpatterns thatindicate acorrection and not atrend. Howcan Imakemoneyina bearishmarket? ContinueReading…………..

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