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Saturday

Bear Markets are enticing! proceed with caution

Bear markets are difficult. Earning a living during a bear market is hard work and extremely frustrating. Numerous times I have given back small gains by trying to turn them into bigger gains. I have gotten burned so many times when a stock goes well for a time and then immediately does a complete reversal for no apparent reason other than drastic short term profit scalping. The term scalping is occasionally used to describe day traders or hourly traders who like to scalp profit quickly by buying and selling in very short intervals. It adds to market volatility and can greatly increase the risk for individual traders. The only ways to profit from this method is buy buying large numbers of shares or buying the most extremely volatile stocks. Scalping is a legitimate way to make money in the market but it is risky because if you are wrong about direction the losses will increase rapidly. I have repeatedly made the mistake of going back to the well one more time after scalping a gain. After buying in again and trying to add to my position a slight decrease in price with twice the shares will erase the gain. I you don't have to trade in a bear market it is better to sit tight and wait. If you want to trade in a bear market anyway just make sure you can survive a drastic reduction in capital.