Stock Market Strategies
Newcomers to the stock market will quickly learn that the market can move in three different ways:
- It can go up (bullish)
- It can go down (bearish)
- It can go sideways (stagnant)
Fortunately, an educated individual can learn the investing strategies that will potentially enable them to make money regardless of the market's direction. For too long the average citizen has believed that the market must be going up in order to make money with investment strategies. There are beginning investment strategies that can be used whether the market is bullish, bearish or stagnant.
If the market is bullish, an investor can make money on a simple stock purchase if the market goes up. A trader can also buy a call option on a stock, sell a put option on a stock, or enter into a bull put spread. If the individual owns stock, they can write a covered call. Any of those strategies will be profitable if the stock price goes up.
If the market is bearish, an investor can short-sell the stock and make money if the market retreats. A trader can also buy a put option on a stock or enter into a bear call spread, a pair of strategies that enable an individual to profit when the stock's price begins to fall.
If the market is sitting still and making very little movement it can be difficult to make money by using bearish or bullish strategies. But a series of non-directional trading strategies are available that can reward the trader when the market is stagnant. Names like the iron condor, butterfly, straddles and strangles quickly become familiar to the trader who becomes involved in non-directional trading.
There are more than a dozen strategies that can be used in the stock market, which again stresses the need for a stock market education. Wouldn't it be disappointing to see the market tumble and either be stuck on the sidelines or losing money, even though it's possible to make money in that situation? And wouldn't it be frustrating to wait for the market to jump into gear while others are cashing in through non-directional trades?
BetterTrades has become the No. 1 provider of stock market information in North America. Thousands of students have gone through the stock market classes and seminars offered by the company in an attempt to learn the strategies and techniques that will enable them to make smarter buying decisions.
