During times like these, finding a safe trade or investment can be downright tricky. With worries of a recession looming before us, how are we expected to make money in the market? If the answer to this question was obvious or easy, we would all be rich. The truth is that there is no easy answer to this question. Trading in turbulent or downward falling markets is tricky; many people have lost fortunes trying to do this.
One of the best ways to make money in the market is to follow prevailing trends using Tom’s EA. If the stock market is falling, find a company with poor numbers and sell it short. Or find an exchange traded fund that is the inverse of a major index and buy that. VIX rose by 35 percent on August 18th, 2011. This basket fund is a volatility measure of the S&P 500 index and because the S&P index fell by 53 points on this day, the volatility index increased dramatically.
The hard part is the predicting. Even the most carefully plotted out trades sometimes fail. In order to survive, you need to commit to diversification. Don’t use all of your money to trade; invest some of it. Investments for long term growth aren’t as flashy as quick trades, but they will help you to protect your capital over a longer period of time. Trading is a tough profession; you need to always be on the lookout for your long term safety. If you put all of your money into trades, your risk of ruin becomes much higher than if you invested a portion of it.
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