It isn’t easy navigating the fickleness of the financial markets. This is especially true when the market moves from a bullish to a bearish mode. Even the most experienced investor or novice trader will need to adjust and adapt to the path through the ever-changing landscape of market forces.

Still, here are some strategies for thriving in positive market conditions – and for surviving in negative conditions, if you find yourself in a bear market.

How to Be A Successful Trader

To be a good trader, it helps to have a nose for opportunity in emerging growth industries such as online gaming. Soak yourself in an industry; know its trends, dynamics, and growth potential. Be up to date on new developments, and products in the industry, especially if they are emerging quickly and being offered to mainstream consumers – growth of online casino games is one industry that many investors are looking at right now, with new technologies like cryptocurrency, augmented reality, and virtual reality all causing a boom in the industry. Every investor needs to do plenty of research before moving forward with any investments.

Now you’re finally ready to do your research and analysis to see what interesting investment opportunities the online gaming sector has to offer. If possible, try to identify companies with strong fundamentals, great products or services, and a competitive advantage in the market. Is there a market for this product here or is there another dead duck hanging out upon your vision, awaiting your investment? The more time you invest in reading up on the various online gaming companies, the more likely you will be to find your opportunity.

Be disciplined and patient in your trading approach: avoid allocating money to hype, or to chasing last week’s winners, or doing anything other than sticking to your long-term value-creation strategy.

Strategies for Bull Markets

When we’re in bull markets, it is natural for us as investors to look for ways to capitalize on the upswing and get the most bang for our buck. Here is what you can do:

Ride the Trend

The trend is your friend. That’s one of the mantras of a bull mantra: the investor who is a trend follower buys an asset when they see momentum, and follows it for as long as the trend continues.

In real life, this could involve identifying assets (say, gold) that have shown positive returns over the previous month, and then topping up on them at the end of the month, when the price is again rising.

Buy and Hold

Buy and hold is another popular move in bull markets: copy what you’ve done before and cling to those original investments in good assets, regardless of the gyrations the market makes in between times.

With this approach, you shouldn’t be too concerned with short-term fluctuations (these are inevitable) but concentrate your efforts on companies you feel have sound growth prospects with business models that should reward you with a decent long-term return.

Diversification

Specifically, diversification goes far in managing risk in any market environment, bull market or not, by providing an opportunity to spread investments across asset classes, sectors, and geographic regions.

This helps to mitigate exposure and concentration risk with respect to individual holdings and to allow an investor to tap into multiple opportunity areas of the market to avoid or reduce the adverse impact of any single market decline.

Strategies for Bear Markets

Bear markets are all about being a little bit pessimistic and seeing asset prices starting to drop.

When confronted by bear markets, we need to shift defensive tactics to protect capital and prevent our losses from increasing. Here are some of those strategies.

Defensive Stocks

Investors in defensive stocks often do better in a bear market than in a bull market by virtue of their tendency not to lose capital: they are usually the companies in industries less sensitive to the business cycle – healthcare, utilities, consumer staples, etc.

Finally, investors could also add some defensive companies – those with predictable earnings, solid cash flows, and low levels of debt – to their portfolios to reduce losses during market crashes.

Short Selling

Short selling is an investment strategy devised to make money when asset prices decrease, thereby providing portfolio protection in the event of a decline.

Short selling refers to when investors sell borrowed assets, anticipating that prices will drop enough so that they can purchase back the same bets at lower costs and simply pocket the difference.

This is an inherently risky tactic since it depends on hitting the market timing just right, and also getting all the risk-management calculations correct. For some, that’s taking a big risk. For others, that makes it a workable strategy for seizing profits when the market is in a state of collapse.

Cash and Cash Equivalents

In a bear market, cash acts as a safety blanket, giving flexibility by maintaining your liquidity.

Cash balances can act as a buffer against market volatility, enabling investors to withstand downturns without being forced to sell assets at a loss.