A bear market is when a market goes through a long period of price decline. During this period, a general economic decline may take place. This happens when the market declines in value at 20% or more. Bear market is the opposite of a bull market.
Forex trading in a bear market can be pressuring, especially for novice traders. Nevertheless, making a profit in the bear market is still possible with some changes in trading strategies. It is believed that if you can survive a bear market, then you can survive any worse market condition.
We all know that it is probably easier to profit in a bull market because prices are on the rise, but here we will crack the code to make money amidst the bear market.
Diversify your portfolio
Check out currency pairs that offer good trading conditions. To determine this, you should have a sufficient understanding of how forex pairs work. It is best to trade forex pairs that usually oppose each other, meaning when one is low, the other goes high.
Spot forex pairs with real potential
During a bear market period, it will not take long until you discover which pairs are struggling and which pairs may offer profit. Therefore, it pays to learn which currency pairs are not worth trading. One way to determine the possible outcomes of the currencies is by looking for signs that the market is undervalued and will soon change. In addition, learn to place your value on a forex pair. Do not get them for their current market value.
Observe time frames
A bear market may last longer than you think or expect. In this case, short time frames may not allow you to see the bigger picture or possibilities in the market. By looking at larger time frames, you are letting yourself see a more feasible situation and determine if it is likely to change anytime soon.
Create a value checklist
Make a list of the various factors you need to have to spot if it has a value to trade such as its behavior in the past and the events that lead to its price increase.
Trade with the right mentality
Lastly, learn to accept that trading in a bear market is different from doing so in an opposing market condition. Take control of your emotions and practice an adaptable mindset because anything can happen when it comes to trading.
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