How To Trade In a Down Market?

Basically - You Don't. There is no rule that we have to trade all the time & that we have to rush into buying some stocks just because it may have fallen to what looks like cheap prices. Never be tempted into buying simply because prices have fallen considerably. Buying when prices are falling is like sticking your neck out under a falling sword, you'll get it chopped off.

When you buy at this time you are hoping & assuming that the fall will stop & suddenly prices will rise again & you will make a ton of money! If you have read that anywhere then thats a load of rubbish. When you assume - you just make an "ass of u n me". Never assume, hope, guess or pray that you are lucky. Doing any of these means you are gambling & thats neither using fundamental nor technical analysis. Its just luck & trust me in the market the only luck you ever get is bad luck.

Be patient. If you have to stop trading stocks for a week or two or more, don't worry. You don't have to trade all the time. In fact the wise trader is the most patient trader. Wait until the fallout is over & when you see a strong technical signal then go in. If that means a 2, 3 or 4 week wait, so be it.

What are buying signals? Look for candlesticks like morning stars, hammers, piercing & bullish engulfing candles at support levels. When these form at support levels then it is a stronger signal. If this is coupled with supports at long term Moving Averages like the 50, 100 or 200 day MAV, then it is further confirmation that the bearishness may be at an end & a new trend may be starting. Also look for positive candles & signals in the weekly charts, they are excellent for changes in trend.

The key to making money is patience & a plan. That plan is a good TA plan. But patience....well only you know if you can be patient. If you want to win then patience is a virtue!