Can you profit from a falling market?

greendoor665

It's possible to fall from a falling market yes, but the more important question is, can you know in advance when the market is going to fall with enough accuracy so you can place your trades and make money, and the answer to that is probably not.

Treesie

greendoor665 wrote: »

It's possible to fall from a falling market yes, but the more important question is, can you know in advance when the market is going to fall with enough accuracy so you can place your trades and make money, and the answer to that is probably not.

Knowing in advance needs a crystal ball, you trade what you see, not what you think. If you wish to spreadbet if the market is falling make sure you have a guaranteed stop in place, it will cost you a little extra but you will sleep at night. You can register for a dummy account with IG if you want to take a look but don't be tempted to have a 'punt' or try and guess the market .... you will loose.

levdon01

Profiting from a falling market is possible but my advice would be to diversify and then ignore share price movements. If the market seems to be overheating then reducing your positions in equities is a natural thing to do. I would advise against short selling equities especially in a money-printing environment - the more they print the higher share prices will go which will hurt the bears. The more money that is printed the more distortions that can occur. I have seen many traders and investors call the top of markets only to see indices rise a further 20%. Hence why I have a stock portfolio and ignore its gyrations. I used to try to time buys and sells to maximize profit but found that this had very mixed success and was not really worth the effort and the stress.

The average person would do better at buying deep dips in stocks that yield a fair dividend and selling if any asset class appears to be in a bubble. Other than that - ignore the noise.