JoHooch (< 20)

How to trade in a bear market

April 25, 2008 – Comments (1) | RELATED TICKERS: AAPL , POT , DGLY

If you are like me, you've probably lost a little money over the past 6 months.  Also, if you are like me, you realized we were in a bear market at least 4 months or so ago.

So why have we lost money?  Basically, most people have trouble switching mindsets.

Does it ever seem to you like most trades lately do the opposite of what you expect them to do?  Yes it seems like that to me sometimes, except for a few winners like POT, AAPL, and DGLY which have propped up my portfolio as of late, most others have been losers.

I hereby invent a new method of trading.  Act as if you are a bull market.  Choose each trade carefully as you would in a bull.  Now here is the difference.  When you go to enter the order, simply choose "short" instead of "buy" and "buy" instead of "short" in the order type field.  Go about your normal trading and investing routine, but just do the opposite.  CRAZY.

I'm about even now, but I've been down about 6% in the past few months.  If I had traded using this technique, I would be up 6%. 

Simple no?

I don't think this strategy would work well right now, since the market seems to be trying to figure out whether to crash or whether to grow.