Trading Justice

TJ 184: Bear Markets


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It can feel like it's impossible to not find a winning trade in a bull market. Entire sectors see anywhere from steady to meteoric rises, companies report increased earnings quarter over quarter... even normally mediocre stocks can feel the uplift of such a market (as a rising tide raises all ships). Week after week, the markets generally continue to rise. It even feels like it'll last forever sometimes, right? Well, we all know how that goes. A bull (or bear, for that matter) market won't last forever. Resistance will eventually be found, tested, and remain unbroken, causing the market to at the least go sideways for a time. In such an instance, the markets become almost dull as they ping pong between constrained high and low. Specific strategies, such as straddles, work well enough; as can directionally trading within support and resistance. ...but what if support is broken consistently, and in a bigger way? Welcome, friends, to a bear market. Folks newer to trading may feel the opposite about a bear market as compared to a bull market: winning trades are almost impossible to find. Not the case at all. You just need to change up your strategy. First, there are always some risers even in a bear market. They can be tougher to find, but they do indeed exist (which is what scanners are for). Alternately, shorting is always an option. Or, you could choose to cash flow by selling options at a higher premium should volatility see an increase, as well. Long and short of it: there are ALWAYS trades if you know where to look. Not sure how to trade in a bear market yourself? Then give this episode a listen as Tim and Matt discuss bear markets, what can cause them, and what you can do to trade them. October's book is 401(k)aos by Andy Tanner. You can find it on Amazon right here, or check your local library. We'll be doing a live audience podcast on October 27 at 7 PM ET to discuss the book. You'll be able to join us right here: Podcast Room For your free 15 day Tackle Trading Pro trial membership, follow this link (https://tackletrading.com/join-pro/) and fill out the form with the coupon code being: theta Also, we'll be giving away a free month of Tackle Trading Pro membership to the best, most interesting review left for the podcast on iTunes! You can leave a review right here.
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