Make Money Trading Even When the Market is Down
June 18, 2009 by W. Alan Gay
Filed under Stock Trading
One of the core questions my coaching clients have asked me over the past few months is: “Can I still make money in stocks with the market down like its been?” The answer is yes, or no, depending on the type of investments you have.
The answer is no if you are holding your investments in a stock fund, mutual funds, or other standard asset allocation accounts. The reason for this is that these large accounts are regulated and do not allow short stock positions. Therefore, if the market declines in the next 3-5 years, as it most likely will, your account will lose money year after year.
Short positions, however, will allow you to make money whether or not the market goes down. These types of investments are only available to companies and individuals who trade individual accounts.
Trading through an individual trading account rather than a fund gives you the leverage to control your investments and make profits daily. The reason for this is that you can buy low if you expect an increase in the stock value, or sell short if you expect it to decline.
So, if that’s all there is to it, why isn’t everyone taking advantage of it? Well, first, you have to be willing to invest around $25,000 into an individual trading account. A lot of folks don’t have the money, or don’t want to take the risk. And there are a lot of challenges for a new trader. You could lose your money fast if you don’t know what you’re doing.
I can suggest a few things to minimize your concerns.
First, find a trading program that gives you low risk trade picks. The program I use and that I recommend to my coaching clients has a 31 year average experience level for its trade pickers. So a trader can simply follow their trade recommendations and have a very high probability of realizing returns. If you remember to set your stops at a level that suits your comfort zone, you will have a maximum loss that is very small and insignificant over the course of time.
Its also critical to find a system that will walk you step by step until you achieve your goals. As an example, in the nine day trading course that I lead, the participants actively learn every piece to the process it takes to successfully trade stock whether it goes up or down.
Despite the program you choose, if it has advisors with the needed know-how and experience as well as a turnkey process you can follow, you can be enjoying profitable stock trading success while those around you are complaining over the declining markets.
