Tips To Make Profits In Bull and Bear Markets
Buy stocks early to take sell at the peak of the rising prices. They happen when the gross domestic product (GDP) is stable since unemployment dropping increase corporate profits. The demand for stocks rise in bull markets. The advance or decline line represents the number of advancing issues divided by the number of declining issues over a given period. A declining line shows correction during a period when markets continue to rise. If the line rises for several months and the averages have moved down it is a positive divergence that shows that there is a start of a bull market. Bull and bear markets coincide with the economic cycle most of the time. The phases of economic cycles are expansion, peak, contraction, and trough. The onset of a bull market is an indicator of economic expansion. There are risks involved in the strategies when you need to make profits in the bull and bear market. Markets trade in cycles. There are many ways of making profits in the bull and bear markets.
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. Buying, and holding has fewer risks than increased buy and hold technique of trading in the bull market. 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.
An investor in the bull market can use retracement additions; hence learn these terms about retracement. Some investors buy in the bull market during the retracement periods.
Find out the meaning of more of these terms associated with full swing trading..
The future date beyond which the seller cannot be allowed to sell the shares is called expiration date. You will be charged a premium in the bear market for the put options. You can sell the stock or the put option at a profit in the bear market if the stock prices fall below the put option.
The short EFT is also called inverse EFT in the bear market, and you can learn these terms about short EFTs. The inverse ETF or short EFT strategy produce returns which are the inverse of a particular index.
A long position means purchasing a stock with the hope that the price will rise.
Long ETFs can be used instead of short EFTs.