For bear hunting to be successful, the trader needs to know something. These are important issues such as “how the bear market differs from the bull market”. Actually, it ‘s simple. Bulls are an upward trend and bears are downward. At first glance, everything is simple. But the peculiarities of human perception of the market impose their imprint. Investors usually bulls seem good, and bears – bad. All because during the long position the downtrend seems very unprofitable to the trader. And it doesn’t seem, it really is.
That’s why traders persistently fear the bear market and try to trade on the bull market. But is the game worth it? Is it possible to earn effectively from the decline? Of course, yes, if you follow the instructions in this article.
What Needs To Be Known?
The huge advantage of the bear market is its calm against the background of bullish. Sharp price spikes for him – a rare phenomenon. The same advantage can be a disadvantage that prevents the trader from rapidly enriching. Depends on which side to watch. The reason lies in the habit of looking at prices with the expectation that they will change dramatically. And in a bearish market, this happens rarely, leading to a stupor. It has no atmosphere to help the trader act more decisively.
Therefore, there are serious difficulties in entering the market. Especially hard for a day-trader. They are so used to trading in conditions of high volatility that the gradual wash-out of the price, characteristic of a bear market, scares them.
The Forex market can be described in many terms. One of them is the “dead zone”. This is a time period when nothing interesting is happening on the market, and therefore at this time traders sleep. Many of them eat, watch interesting videos, sing and communicate with their native people. So, in the bear market, the dead zone is a constant phenomenon. The market is moving, but slowly, prices do not fall sharply. Many traders at this point succumb to pessimistic sentiments, and therefore they come out with losses.
What Are The Features Of Bear Hunting:
1. It must be borne in mind that the bearish trend cannot continue forever. Even if it lasts long enough, the moment when it is replaced by an uptrend will still come. Cheers, the bulls rule, and you don’t have to worry. But what has to be done if you decide to open a deal in a bearish market is to determine the duration of the downward trend.
2. The market unfolds when it reaches resale. During this state, the current price becomes not interesting for sellers. In addition, the trend may be influenced by economically positive news (for example, the growth of the base currency in the currency pair). At such moments, bears are alive closing deals because they realize that they have nothing to do.
3. One of the main tactics of trading in the bear market lies in the fact that a person should withdraw from circulation those currency pairs that in his opinion are subject to risk.
Thus, bear hunting is a matter of responsibility and requires patience. But there will be a return if you show these qualities. Although no one makes you trade during the downtrend. You can wait for the uptrend.