While no one can predict what’s coming in regard to the stock markets, some of the best analysts are insinuating that these recent dips are a sure sign of the coming bear market. A bear market is when prices of stocks fall and selling them is encouraged, as opposed to a bull market when share prices rise and buying is encouraged.
The closest thing to aid in predicting what’s going to happen within the market would be to use an options trading simulator. With a simulator, there’s no risk to capital while analyzing trends and data points. However, you won’t reap the benefits of any winning stocks unless you switch to a real money account with a broker.
The market tends to cycle between a bear and bull market. A ton of economic factors go into the timing of the different markets, but nobody could possibly predict these exactly accurately. Bull markets usually come with a strong economy, investor optimism, and a high demand for short-term securities. Bears however are more closely related to weak economy, negative views on investment and the need for longer-term investments.
Deciding how to invest and how much to invest can be a big deal especially if there’s speculation about the future of the market.
People refer to investing in the market as “riding the wave” because they’re expecting to stick through it for the ups and downs. Some firms or even individuals use option-trading simulators to practice riding the wave before actually getting in the game. It’s important to either practice investing, or educate yourself thoroughly before putting any money into a particular stock or option.
Just last month, our market had a 9-year anniversary of being in a bull market. Back in the 2008 recession, the Dow Jones Industrial hit a low of 6,547.05 points compared to a high just one month ago of 24,190.90 points. Most people didn’t have the means to back then, but can you imagine the growth of your portfolio if you were able to ride out that tsunami? With such a high, there’s bound to be a dip, correction, or total drop coming sometime soon.
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Economic factors including interest rate and inflation is on the rise, leading professionals to believe the bear market is going to be following closely behind. However, guessing the date in which we’ll enter a dropping market is simply trivial.
There’s no denying the volatility of the market in the past couple of months. As MarketWatch puts it some factors include “investors grappling with the vision of a trade war, probable regulation for big capitalization internet companies, and changing financial policy from the Federal Reserve”, factors we couldn’t possible calculate in our heads when deciding on buying a stock option or not. This is why options trading simulators can come in handy. You can track the progress of a particular option or market as a whole before diving in.
Nicholas Colas, a co-founder of DataTrek research, is a firm believer in the upcoming bear market. He determined three situations in which the market decline could approach. These three include the “slow motion train wreck”, “catalyst-driven price reset”, or a sudden crash. Colas doesn’t see any of the three being detrimental, as he noted that they sound worse than they will actually be. But, like noted before, no one can predict the market.
If you’re new to the stock trading market, you might want to look into other forms of trading, including proprietary trading, which you can learn more about from this article on the best prop trading firms. Additionally, if your firm is looking for new software or manages client portfolios, ETNA has integrated mobile trading apps, stock trading simulator software, web trading platforms, and even back office systems. The trading simulator is used for professional web and mobile stock trading with life-like executions without risking any capital. The platform is personalized so that your trading platform becomes your own. A great way to learn more about the ever-changing market is to analyze it you, risk free. Sign up for a demo account today.