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Entering the Bear Market? Here’s How to Start Trading in a Bear Market

By Andrew Aziz  |  
Day Trading Success  |  
Jan 24, 2022

Dear Traders,

I hope everyone began the day and the week – nice in this volatile market! Brian and I were able to make some great reversals on Indexes. Brian took TNA for the reversal of IWM and I took SPXL and TQQQ for the reversal of SPY and QQQ. For the latter, an excellent reversal happened at around 10:16am ET. You can watch our recap here.

We have also recorded another episode of AfterHours with Traders. Although I unfortunately felt sick on Friday and wasn’t able to participate, I know you will enjoy this episode which features Thor, Ardi, and Brian. Here’s the link to it.

Last week was both a short week and a very volatile week. Most assets fell over 8%. As I am writing this newsletter, the market is down over 2% with QQQ itself down over 3%. The standoff over the Ukraine coupled with pressure on growth stocks ahead of the Federal Reserve’s imminent rate liftoff has investors firmly in risk-off mode. There is not much buying, but there is a ton of selling, and that is causing the market to stay in a weakened position. Crypto assets have sold off once again, showing that they are not a hedge against the market. They indeed are correlated to other assets, and in particular the technology sector. The plunge in Bitcoin (BTC), the largest cryptocurrency, is continuing this morning. It’s trading close to $33,000 right now, a loss of more than 50% from its all-time high in November. Ethereum (ETH), the second-largest token, has lost almost a third of its value since Thursday. Memecoins such as Dogecoin have also tumbled.

The Nasdaq has been officially in full correction and is now down over 18% from its highs. The S&P 500 is in full correction territory as well, and down nearly 11% from its highs. A 10% drop from a high is considered to be a full correction. One of the big questions in the days to come will be whether this is only a full correction or if we are already in the midst of a bear market. A bear market is considered to be a drop of 20% from the highs that stocks were setting. The average decline during a bear market is around 35% and lasts approximately 290 days. Apparently the bull market is over, and I read a tweet. Maybe the bull run wasn’t about the prices going up but the friends we made along the way!

This week at Bear Bull Traders we are again holding a series of important webinars to help you navigate this volatile market. I encourage all new traders to join our Monday Onboarding and Technology class with Carlos and Mike at 7pm ET. Mike is also hosting a special Monday Technology webinar at 4:15pm ET on the subject of setting up your trading desk.

For Tuesday Strategy, Peter is presenting a webinar titled: From the Beginning: A Day-by-Day Plan to Start Your Trading Journey. In this webinar, Peter will discuss the realities of day trading as well as walk you through a 1-year plan that incorporates all of the various steps you can take to successfully set yourself up for a career in day trading. It starts at 8pm ET.

Créde returns at 5pm ET for Psychology Wednesday and we will be offering our three usual mentorship sessions on Thursday.

All webinars are recorded and available for further viewing in our Education Center.

To your success,

PS: Please don’t miss out on the opportunity to practice your trading strategies on our Market Replay Tool. It is available 24/7 – every day, every evening, and every weekend. It is convenient, it is free, and it always will be! You can take a look at it here. While at the site, don’t forget to also sign up for the educational materials that Aiman regularly sends out.