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Can money be made in bear markets if you aren't shorting?

Discussion in 'Beginner's Lounge' started by darkhorse70, Oct 16, 2014.

  1. galumay

    galumay learner

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    Absolutely, its a fantastic opportunity for long term investors, I hestitated to mention it because the discussion seemed so focussed on trading from the OP onwards.
     
  2. darkhorse70

    darkhorse70

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    Smurf thats what I was thinking. I was looking at how long bear markets on average last for so I could hop on after. I think the 08 GFC was only 1 year till the bottom. Im sure an oppurtubity or two would be present over a bear market.
     
  3. >Apocalypto<

    >Apocalypto< 20.03.2012

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    writing Call Options.
    Buying Put Options

    Options are a whole new thing tread carefully.
     
  4. skc

    skc Goldmember

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    Some potential approaches from an old thread on the same question.

     
  5. darkhorse70

    darkhorse70

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    Thanks apocolypto/skc. Maybe a good time to start understanding those other tools.
     
  6. Julia

    Julia In Memoriam

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    OK, so how would you determine an entry point, having ensured that a bottom had been reached?

    And on this:
    When you exclude the word "hope" from your trading/investing vocabulary, you will be getting somewhere.
     
  7. darkhorse70

    darkhorse70

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    Julia, id wait for a confirmation after the trend had clearly changed/reversed. Then id wait for clear changes in the trend of stocks and hop on once some clear level had been indicated. Obviously you would have a heap of resistance on the way up etc.

    I say hope in the sense that nuthing in this endevour is certain. Not on any one particular trade anyway. It can go both ways no matter how much you analyse the trade. I didnt mean close your eyes and take a shot in the dark or cut corners etc and hope for the best.
     
  8. Julia

    Julia In Memoriam

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    Thanks for clarifying, dh. Good luck.
     
  9. Trembling Hand

    Trembling Hand Can be found on the bid

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    My point was that with a $7000 account and a volatile $50 stock you will not be able to position size any amount that will make it work on an EOD trade.
     
  10. darkhorse70

    darkhorse70

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    No problem Julia.

    I think I get what you're saying TH. I understand I dont have the capital to buy a large enough position if thats what you mean? I dont think ill plan on trading short term. With my anxiety and all I dont want to be an emotional wreck while I trade.

    And If I did want to trade EOD it would have to be in the aussie markets. I need my sleep lol.
     
  11. darkhorse70

    darkhorse70

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    Care to expand with an example so it has some educational value?
     
  12. tech/a

    tech/a No Ordinary Duck

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    Risk 30c
    2% 7000 = $140
    That's 467 shares. @ $50 = $23,350 (Using your margin)
    Say price rises 30c by close (EOD) That's $140
    less brokerage
    tax 35% say You made $91 approx.

    This is the correct way to us margin
    You don't have $23,350 but you are not taking on a greater Risk than the trade below.

    Now take a $5 stock
    same risk 2%
    467 stocks @ $5 = $2335
    Stock rises 30c ---etc blah blah

    Same figures as above.
    Better bang for buck but UNDERCAPITALISED.
     
  13. DJG

    DJG

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    Dont mean to burst your bubble but before you worry about shorting and Twitter - figure out your plan!

    This was less than a day apart.

     
  14. skyQuake

    skyQuake

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    Would work better with a CFD provider, since IB is screwed for stocks atm.

    Also part of your edge darkhorse is your ability to trade stocks without making waves - you can get in and get set while whales are still scrambling around for liquidity (and likely to do so for the nxt hr)
    This is especially true for mid tier US stocks, where there is no opening auc and stocks don't gap around as much. They tend trade (thinly) to get to 'fair value', whereas bigger caps have pre-market trading and open at 'fair value'
     
  15. tech/a

    tech/a No Ordinary Duck

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    For shorting yes.
    figures were more the point.
     
  16. darkhorse70

    darkhorse70

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    Ok, I see tech.

    I agree that im undercapitilzed for EOD trading TH, I wouldnt even consider EOD unless there is no other alternative. My account is at $8000 now haha.

    Dangaff I was giving hypothetical situations. Ofcourse im going to always contradict myself. Im always learning and evolving. I do have a plan. Its not intra day but if it came to that then I would change my strategy. But do I curre tly want to engage in it? No.

    Skyquake, I agree about the getting in and out quickly. Ill have to get some more confirmation I guess before I start to formulate a new plan.

    Thanks
     
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