Good Ways to make profits in a Bear/Falling Market
Written by Olabisi Oluwatobi
Edited by Ijewemen Fortune
There are numerous different strategies that investors use to make profits in a market that has been oversold, for instance, shorting/selling in the financial market e.g in crypto futures, forex, etc. Now, a lot of people think that's the only way to earn whenever the financial market is on a downtrend.
In this article, we'll take a look at some good ways to also make money in a bear market, all you need to do is calm down, read and look out for which strategy might be right for you.
Without further ado, let's look at the meaning of the keyword/phrase here “Bear Market”
What is a bear market?
A bear market is when the price of an asset, e.g cryptocurrency, stocks, etc. drops over a sustained period. During this period many people lose money because they don't know what to do, e.g “Do we buy more or do we sell off what we already have?” and they keep feeding the bears their money. Bear markets are often associated with a high degree of market uncertainty and can be difficult for traders to profit from.
A lot of people don't know how to make profits in a bear market, but there are some strategies you can employ to acquire or protect money even when the market is down.
Now, let’s look at some good ways to earn in a bear market
Ways to earn in a bear market:
One way to profit in a bear market is to short-sell stocks. This is when you sell a stock you do not own and hope to buy it back at a lower price so you can pocket the difference. This can be a risky strategy, but if done correctly, it can be profitable.
Another way to profit in a bear market is to invest in defensive stocks. These are stocks of companies that tend to do well even when the overall market is down. Some examples of defensive stocks include utility companies, consumer staples companies, etc.
However, there are still additional ways to make money during a bear market. One of which is to trade cryptocurrency. Cryptocurrency trading can be a lucrative way to make money, even in a bear market.
Here are some tips on how to trade cryptocurrency during a bear market:
1. Look for coins that are undervalued.
2. Find coins with strong fundamentals.
3. Don’t panic sell.
4. Use stop-loss orders.
5. Take advantage of dips to buy low and sell high.
By following these tips, you can still make money even when the market is down. So, don’t despair if the dip comes– there’s still an opportunity in a bear market!
Another good way to earn is to invest in leveraged tokens if it's the crypto market, you always see things like BTCup, BTCdown, BNBup, BNB down, etc. If you know that the bear market is going to last a while and you don't want to FOMO into a token but you're eager to earn some money, then invest in leveraged tokens. If it's a bear market you go for tokens like BNBdown, LTCdown, BTCdown, etc. While if it's a bull market ( rising market) you go for tokens like BNBup, LTCup, BTCup etc.
Finally, another way to profit in a bear market is simply to wait it out. Many investors panic and sell their stocks and assets when the market starts to decline, without even confirming anything from other sources' reasons behind the decline. While others Panic buys due to FOMO (Fear Of Missing Out). However, if you can stomach the volatility, you may be able to buy stocks at a discount and then sell them later when the market recovers.
When is the best time to invest in a bear market?
The best time to invest in a bear market is when the market is down. This allows you to buy low and sell high.
How do I know if a low is the lowest low an asset would go?
- Technicals analysts always know how to work their way around the technicalities of the market, I recommend learning it.
- If you don't have the time to learn, then I recommend joining a good signal room with promising and active technical analysts.
- DCA: Dollar-cost averaging is something I encourage, it is an investment strategy that strives to lessen the impact of volatility on the purchase of assets. It involves buying equal fiat amounts of the asset at regular breaks.
But before I bid you farewell, remember that not trading is also a trading decision!
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