ITRADER - <span>INVEST IN YOUR FUTURE</span>

Risk Warning: Trading FX/CFDs involves substantial risks. Losses may exceed invested capital.

ITRADER - INVEST IN YOUR FUTURE
EURUSD1.05623:59 09.12.16
GBPUSD1.25823:59 09.12.16
EURCHF1.07423:59 09.12.16
USDJPY115.35823:59 09.12.16
AUDUSD0.74523:59 09.12.16
USDCAD1.31823:59 09.12.16
APPLE113.84522:59 09.12.16
GOLD1159.84023:58 09.12.16
EURUSD1.05623:59 09.12.16
GBPUSD1.25823:59 09.12.16
EURCHF1.07423:59 09.12.16
USDJPY115.35823:59 09.12.16
AUDUSD0.74523:59 09.12.16
USDCAD1.31823:59 09.12.16
APPLE113.84522:59 09.12.16
GOLD1159.84023:58 09.12.16

Prices are indicative

Learn to Trade in a Bearish Market

iTrader - Learn to Trade

Worries about an economic slowdown in China and plunging oil prices can send global marketing tumbling. So if you’re beginner looking to jump into a bearish market, you have to first learn to trade in this environment.   

But before learning to trade in a bear market, you have to first understand what this investment channel is all about. 

What is a Bear Market?

A bear market is basically a condition where securities prices drop, creating pessimism across the board. This, in turn, sends the stock market crashing down to be self-sustaining. 

When pessimism rises, investors start anticipating losses. As a result, selling will significantly increase. But the figures in this scenario can vary quite a bit. 

For example, from the peak of multiple board market indexes to a 20% downturn in let’s say the Dow Jones Industrial Average (DJIA) over a period of a couple of months is considered as an entry into a bear market. 

However, when you learn to trade in this environment, you have to note that this shouldn’t be confused with a market correction. 

A correction is a short-term trend and will last less than a two month period. When a correction occurs, it provides a good time for value investors to find a way to enter the stock market. 

This happens as it’s almost impossible to speculate about the bear market’s bottom. As a result, recouping your losses can end up being a major uphill battle for investors.  

Short Sell and Put Options Create Investment Opportunities

The bear market usually occurs about every three and a half years. The last bear market was during the global financial crisis that occurred between 2007 and 2009. 

When you learn to trade in a bearish environment, it’s best to learn about short selling. Investors can engage in short selling by selling shares that are borrowed and then buying them back at a lower price. 

The short seller borrows these shares from a broker before the order for a short-sell is placed. The difference between the selling price and the buy-back price is called “covered.” 

Finally, you can also have put options which give the owner a right but not the obligation to sell at a specific price by a certain date. 

This technique can be used when speculating on falling stock prices. Then it can be hedged against the falling prices to safeguard your long-term portfolio.

Risk warning: Trading Forex and CFDs entails substantial risk of loss and it is possible to lose all your invested capital.
These products may not be suitable for everyone and you should ensure that you understand the risks involved.