How to Make Money in a Down Stock Market

By W. Alan Gay

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.

Stock holdings, mutual funds, or asset allocation investment accounts make it very difficult to make money in a down market. This is because these investments are held in large, regulated accounts that don't allow short stock positions. So, if the stock market goes down, as it probably will over the next three to five years, these accounts will lose money year after year.

Using the short position strategy, though, will give you the leverage to make money both when the market is up and down. But you can only take advantage of short positions if you trade through an individual account.

You can take charge of your investments and profit nearly every day by trading through an individual trade account rather than a fund. That way, despite whether a stock value increases or decreases, you can make money, buy buying or selling short, as applicable.

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.

The first step is to find a trading system that provides you minimal risk recommendations. The system I and my students use has stock pickers with an average experience level of thirty one year. This means that you can just follow their suggestions and are fairly assured that you will make a profit. And if you set your stops to tie in with your personal risk tolerance level, your loss over time will be minimal.

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.

Regardless of the system you choose, if you make sure that it has experienced advisors and a program that walks you through every step of the way, you can be smiling all the way to the bank while everyone around you is moaning about the poor performing stock market. - 23200

About the Author:

W. Alan Gay has been a day trader and trainer for 15 years. His free report describes Alan's voyage to becoming successful at trading stocks and gives practical techniques he and his students have used to consistently trade profitably. Click to obtain a free copy of his report and learn more about how you could be trading stocks profitably in as little as fourteen days.