Friends … anything's possible … but there are a lot of factors pointing toward a market selloff.
Don't panic, there are still opportunities for traders during bear markets.
That's what we're going to discuss today.
First of all, remember that three out of four stocks follow the market. If you decide to trade and hold overnight, use extreme caution. The odds are against us.
Instead, there are two main ways to profit in this market …
- Short an overextended stock that's been running for days.
- Go long on quick intraday trades after a huge stock selloff. Play the bounce.
A word of caution; shorting stocks is much riskier than long positions.
From a short position, a trader makes money when they buy back stock for less than they sold it. Here are the mechanics: Borrow shares from a broker, sell high, buy low, and return shares to the broker.
But in the market, prices can theoretically increase indefinitely.
Let's say you sold short 10 shares at $5. Now you've got $50.
But you have to buy those shares back, hopefully at a lower price.
Uh oh, here comes a short squeeze, the price rockets to $150. Now try buying the 10 shares back …
See what we mean?
It's your choice, but for new traders, we suggest long-intraday strategies.
There's a pattern called the "Panic Dip-Buy". It's one of the better patterns in a potential market selloff. And we found a verified trader that explains it pretty well.
Here's the link.
Make sure to trade with a plan!
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