When the market is going up, it's easier to trade than when the market is going down. Many traders find that they can make money trading in bullish markets, but when there is a major correction or the market is bearish, they literally freeze and can't trade successfully or find profits in their trading.
First, when a market crashes, it's important to realise that the trend has changed from being bullish to being bearish. It is in people's nature to look for someone to blame or a "reason" to explain away the fact that the market trend has changed. But if the trader doesn't accept that he is the only one who can trade his way out of a bearish market, he will find that he can't stay in his position and that he is losing money every day as the market stays bearish. It doesn't help to blame your losses on your broker or a friend who gave you bad "tips" instead of taking responsibility for your own trading decisions.
If prices drop suddenly and you lose money, you need to accept that it is now your job to take steps to get out of this situation with profits.
Second, it's easy to make money in bullish markets by buying stocks at the beginning of a trend, holding on to them, and coming back a few days later to cash in. You can't do this in bearish markets.
In bullish markets, you trade with the trend, and as long as the trend is up, you stand to make easy money. In bearish markets, on the other hand, the market consolidates, trends are "shorter," or the market moves sideways, with prices moving back and forth between two ranges. When the market is going down, we tend to focus more on range trading than trend trading. So, if you don't know how to switch from trading in trends to trading in ranges, you could get caught in short-term changes in trends, have whipsaws, and lose money by trading in trends when the market is down.
Since 1987, I've worked with traders who have been through a number of major market corrections. This has led me to believe that you can't trade carelessly when the market is down. When trading in a bearish market, there is a lot less room for error in a trading signal. I've seen traders who can quickly switch from trading long-term trends to trading shorter market swings or ranges in order to make money from their trades. In bearish markets, they are happy to make less money, but they trade more often and in larger amounts. So that they can make more money, they can talk to their brokers about getting the best brokerage terms or use online trading platforms that offer discounts.
In bearish markets, the trader who range trades will be in the best position to take advantage of the shorter and faster bounces that happen when stocks get oversold and go back up. During bearish markets, he will have a better chance of making money if he takes responsibility for himself and learns to trade in a range.
