Many struggle a lot when they want to sell stocks, currencies, futures, commodities and etfs. After one has valid reasons to sell, one wants to sell precisely in a timely frashion without being put under pressure.
That is why I want to demonstrate how one can sell in the financial markets like a bearish trader or investor.
Let's get started.
First Step To Sell Like A Pro In The Financial Markets
One must validate the bearish setup on the specific higher time frame.
The daily chart's higher time frame is the monthly chart. Weekly chart's higher time frame is the quarterly chart. Monthly chart's higher time frame is the yearly chart. 2H and 4H charts' higher time frame is the weekly chart. Hourly chart's higher time frame is the daily chart. 15M chart's higher time frame is 4H chart and 3M chart's higher time frame is the hourly chart.
Bearish Signals On A Different Time Frame
Once the bearish trading setup is certified on the higher time frame, one must switch to the signal time frame and wait for the clear cut signal. Please check my article on the trading signal.
The signal time frame for a monthly trading setup is the daily chart. The signal time frame for daily is hourly. 15M chart for 4H chart. 4H chart for weekly setup. Please check my article about the top-down trading method.
Bearish Trade Signal On Entry Time Frame
The entry is the signal on the entry time frame when the New York or London stock exchange is open. One must always follow the trading drill. The trading drill is about the above steps that a professional bearish trader follow when he or she is bearish.
So, one wants to learn all the bearish trading tips and tricks first before reading this article.
It is not helpful if one does not understand first those tips. Master them first before mastering how to sell like a bearish pro. It is one thing to know or recognise a bearish financial instrument and another to precisely sell like a pro.
Why Is It Important To Know How To Sell Stocks Like A Professional Trader
I heard people saying if one wants to sell, why one does not just sell. It is crazy in my opinion to just sell after one has spotted a bearish trade setup. I would say good luck with that. Only those with large investing fund who do not care one bit about controlling and managing risks will take that approach.
Considering that the markets rise more often than they decline, it is always more challenging to sell a bearish financial instrument than to be bullish.
In fact, one ought to learn how to sell in the financial markets especially if one is using CFD. The potential loss is unlimited because after one sells, the stock can continue to rise for a long time.
Really, it is easier to buy than to sell because of the markets' natural progression.
Warning Never sell into a support level. It is easy to understand that, but it can happen if one does not draw all the key levels on the corresponding higher time frame during the validation of the trading setup. Please draw all support and resistance levels, trend lines, channels and pitchfork tools.
Be sure to always sell on the edge to minimize the risks.
Banking Profit As A Bearish Trader
A bearish trader must be agile like a leopard. Use limit orders to secure gains before it is too late. The price can bounce up rapidely after an initial drop. Bank profit consistently or use a trailing stop to cream it all the way down.
Know the price targets because that will help to know where the price headed. It is paramount that a bearish trader master how to set stop losses.
Advantage Of Selling As A Bearish Market Player
Most professional bearish traders understand more how the financial markets work than their bullish counterparts.
Usually, they are sophisticated market players who can play the financial market game on any field. That is why I recommend that one really master the art of shorting financial instruments especially if one is dealing with a large amount of money.
The gorgeous advantage of selling versus buying equities is the speed of the reward because the price drops faster than it rises. One, two and three; and it is all done and dusted very fast. That is why a bearish investor should never sell if he or she has missed the best entry point.
Warning Sell only after a rally to the edge, and common sense trend line is broken in a down trend. Be sure that the bearish trading signal is at a resistance level. If not, do not take it. Come out of the bearish trade as soo as the trading signal becomes obsolete. Do not chase the price down, but allow it to come to you.
The second advantage of being a bearish trader is that one will be laughing all the way to the bank if one is right; and others are buying. One can make money when others are sitting on their hands waiting for a new bullish trend.
The third advantage of being a bearish trader is that one can buy and sell throughout the financial markets' cycle. One is more active, agile and prudent.
Really, in my opinion, bearish traders and investors are more prudent than their bullish counterparts because they understand that the markets can rise and fall instead of expecting it to rise non stop for ever.
Another Advantage Of Being A Smart Bearish Trader
Most smart bearish traders know exactly what the bullish traders are up to. They can out play them anytime. That is why intelligent hedge managers do sell and buy.
Alright, I will stop here knowing that after one has digested this article, one will use a demo account to practice until one is really good at it. It may take six months, a year or more. It does not matter because the most important thing is to keep improving as a short seller.
In the near future, I will be writing about how to hedge bearish positions.
Please stay tuned.
It is important to know exactly how to sell in the financial markets. It is called short selling. Both traders and investors use CFD, put options and spread betting to short sell.
A smart short seller must first put defensive measures in place before jumping up and down to sell and hold. Obviously, short selling is not for the amateur financial markets dealers; but agile and highly sophisticated markets actors. When one finally masters how to sell, one has effectively joined the elite group of markets players who do not only buy.
I recommend that one first read my article about the bearish tips and tricks before reading this one if not please do so.
That will do. I am pleased that I have finally put the pen to the paper to write this essential article about how to sell stocks or any financial instruments like a pro. I hope it is helpful to many. Please share and bookmark it if you like it. I will really appreciate that. Thank you for reading.