How to Trade in a Bear Market

Part of the Trading For Dummies Cheat Sheet

When the market is reflecting investor fear and uncertainty — is a bear market in other words — your trading strategy should focus on looking to sell or short fundamentally weak companies with the following characteristics:

  • With poor earnings or no earnings.

  • In a weak sector.

  • In a declining economy.

  • While the stock is approaching a technical sell signal on its bar chart and performing worse than the average stock with low relative strength.

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