The bears got control of the Dalal Street in the last hours of today's trading session, which resulted in the Nifty closing below 18-month low level. Huge selling pressure on market when the Nifty broke the 4800-mark. The 30-share BSE Sensex plunged 297.50 points to close at 15,848.83 after hitting an intra-day low of 15,765.53. The 50-share NSE Nifty touched an intra-day low of 4,720, before closing the session at 4,747.80 (lowest closing for the first time since February 5, 2010), down 91.80 points.
So what should do a trader in this market??
Here are some trading strategies for the bearish market-
- Simply, if prices are falling and fundamentals indicate a significant downturn, why not sell your assets early, and wait until the next upturn to re-enter the market? Although you may lose some money in the initial sell-off, you are likely to earn it back if you re-invest once assets have bottomed-out.
- Exiting any long position at the first sign of trouble
- Stop trading with your guessing.
- Monitoring your positions closely.
- Honoring your stops rigorously.
- You also need to consider hedging long positions by using options. If you're using margin for leverage, exiting failing positions quickly is even more important.
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