Posted on 16 October 2012.
The time to come up with bear market trading ideas is before a bear stock market decline occurs. A bear market is defined as a 20% or greater sell off in major stock market indexes. Bear markets usually occur in conjunction with economic recessions. Tracking economic conditions for signs of a pending economic recession is how stock traders decide when to implement bear market trading ideas.
While it is nearly impossible to call a stock market top, it is very important to time the implementation of bear market trading ideas, so that bear market trades are put in place when an economic recession looms on the horizon. When a recession occurs, it is highly likely that a stock market rally will end and a bear market will take hold of the stock market.
The following are some bear market trading ideas that stock traders can utilize to try to make money during a bear market sell off. These bear market trading ideas include stocks, mutual funds exchange traded funds (ETFs), and options.
Once bear market trading ideas have been considered and bear market trades have been established, a trader has to determine where to exit their bear market trades for profits. It is important not to hold onto bear market trades throughout an economic recession, since a bear market decline usually ends well before a recession ends. Bear market trades that are profitable should be closed when a recession appears to be nearing a bottom to lock in bear market trading profits.
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