Have you heard the saying, “Bulls make money, bears make money, hogs get slaughtered”? It’s a good reminder to forget labels and just follow the market trend.
I’m bringing this up now, because there seems to be a daily battle between the bulls and the bears. On most days, the bulls have the upper hand and seem to taunt the bears endlessly. But when the market is tanking and the bears take a vicious swipe, traders and investors get spooked. Some panic.
There’s no need to panic. And there’s no need to “always” be bullish or bearish.
Labels don’t matter – follow the market trend instead
I don’t choose sides when I am trading. Instead, I uncover the trend and momentum, and I ride the trend for as long as it lasts. It doesn’t matter if the trend is bullish or bearish. As I said above, you can make money in both directions.
So, how do you know if the current trend is changing directions? I like to use technical tools, such as the VWAP (volume-weighted average price), MACD (moving average convergence/divergence), and stochastics to determine which way money is flowing.
If you’re a long-term investor, you will most likely benefit from keeping a bullish perspective, as we know markets consistently move up and to the right. If you want to add to your portfolio, you may want to buy stocks on dips and during large pullbacks. It is in these moments when the best investment opportunities are in front of us. When others are selling, grab the chance to build your wealth.
Bottom line, if you’re bullish or bearish on the markets, it is really of no consequence. Markets go up and down all the time, and they don’t follow a particular schedule. If you follow the market trend, you can make smart trade decisions and watch your account grow larger.
