How To Make Money In A Stock Market Crash



The markets have taken a pretty big hit this past week, and everybody is on edge right now because some people think the stock market is crashing right now. 

If the markets were to actually start crashing, it wouldn’t be something you would see in the news or from financial media outlets, because the higher powers on Wall Street and the big banks would not want to create a panic and have everyone sell their stocks, bonds, etc.  That being said, as a day trader that knows how to trade stocks, you can capitalize on the downfall by shorting stocks or buying put options for stocks that are in a down trend.  

Even if the overall markets are in a downtrend and falling hard, it is still a good idea to have a proper strategy and not just enter a position blindly. 

When a stock is in a downtrend it is going to have bumps and bounces on the way down, and if you happen to enter a trade right before a bounce, it might make you panic and rethink your decision due to seeing your trade go red (incur losses) right away, even if you have experience and know how to trade stocks. 

One strategy can be waiting for the stock to break down and fall below a key support level or fail to break through a key resistance level and fall back down.  Another strategy which can be consistently successful is being able to identify bearish patterns forming and taking a position at the right time.

 

 


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