Strategies on how to survive in a bear market
We all know that there are two phases of market (bear and bull) and we can’t always enjoy a bull run forever and as bear market steps in we need to accept it and adapt accordingly. In this article we will talk about some of the strategies which can help you to be a profitable trader in bear market.
1. Don’t try to catch a falling knife
One thing a trader should keep in mind is that it’s okay to miss pico bottom. Nobody is perfect and not all can nail bottom everytime. Opportunities are endless in market, wait for the price to bottom out before buying it. Always wait for confirmation before apeing into a trade.
2. Dollar Cost Average (DCA)
Look at the coins you are planning to DCA, do your research on them, look at the team behind the project, look at gradual evolution over time. It is easy to assume that anything will trend upwards in the long term. Remember this strategy is for long term traders and those who DCA in a bear market are always rewarded in bull run.
3. Trade ranges
Don’t keep high hopes while entering in a trade in bear market. Try to play range to range, buy at support and sell at resistance. Don’t be greedy at resistance and let your set-up play fully. Either enter at range low or enter into a trade on a range breakout.
4. Stop loss
Stop loss is must while entering into a trade. Don’t ever let a trade play until liquidation, that’s the worst thing you can do for yourself and your portfolio. Try to move stop loss on breakeven when your trade is in profit. Minimizing the chances of loss is very important. Protect your capital.
5. Manage Risk
DON’T GO ALL IN, yes you heard it right don’t go all in a trade. A profitable trader will always suggest you to use 1–2% of your capital in futures. Always manage your risk smartly. Don’t let one trade ruin whole your portfolio. To manage your risk you can use trailing stop loss and use less leverage.
Always try to find out what works best for you and stick to them. These little strategies have worked for me in past and hope they can help you all in some way.
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