Being able to make money when the stock market goes down seems counter intuitive but it’s entirely possible to profit from market falls. In fact, this is a huge part of online stock day trading strategy. In this article we will go through the top 5 tips on how to make money when the stock market goes down so that you can learn to make money in both bull and bear markets.
Make Money When the Stock Market Goes Down Top Tip 5 – Short Sales
If you are interested in day online stock trading in a falling market then short selling is one tactic you can use to profit from price falls. Selling shares that you do not own is quite risky because if the share prices rise instead of continuing to fall then you can lose a lot of money. In fact, the losses can be as high as the price of the share as it goes up, which there is no ceiling for! However, if you are confident in a continued decline then making uncovered stock sales is a great way to make a profit.
Make Money When the Stock Market Goes Down Top Tip 4 – Micro Trading Online Markets
Paying close attention to the share market over the course of the day’s trading can give you the opportunity to make multiple small sales over the course of the day. Even when a market is falling prices on individual stocks continue to fluctuate up and down and there is always room for a profit to be made. Micro trading in this way requires two things: practice and the best online stock trader commissions available. The smaller the commission on each trade you make then the easier it is for you to trade smaller amounts and earn a profit.
Make Money When the Stock Market Goes Down Top Tip 3 – Finding the Best Stock Trader Online
When the market is falling finding the best online stock trader for you is even more important. This is because you need either: better trading advice if you have a full service broker, or, cheaper trades if you are day trading. If you are trying to make long term profit then you want to ensure your financial security by talking to the best analysts possible and you should not be afraid to change brokers to suit. If you are doing day market trading online during the recession then you are instead going to want to trade in the smallest amounts possible to minimize your risk and the only way that you can do this is with the cheapest broker possible.
Make Money When the Stock Market Goes Down Top Tip 2 – Spread Betting
Spread betting allows you to hedge against a price drop on a particular investment. If the price drops by the amount you bet then you will make that in profit. However, similarly to short selling there is the risk that you will lose money if the price goes up. However, unlike short selling here the risks are limited to the spread that you have bet on. As such, you can mitigate your risk somewhat with conservative spread betting.
Make Money When the Stock Market Goes Down Top Tip 1 – As An Online Currency Trader!
The top way to make money when the stock market goes down is by trading currency instead. Trading online markets in currency gives you the flexibility to make spread investments that are diversified globally. You can almost make your investments recession proof by investing in currencies from many different countries around the globe. If you spend a bit of time studying the economic decline you can even buy and sell currencies as a way of profiting off the drop in financial wealth of certain countries.
A good example with the recent economic decline in the USA has been the purchasing of Australian currency to insure against the decline. The Australian dollar has improved significantly against the greenback directly inverse to the decline in the US. As a US citizen, buying Australian currency has been an excellent investment. When things start to level off again investors will be able to sell their AUD investments and reap a profit in USD. In fact, online currency trader profiteering has been booming as a way to make money when the stock market goes down.