IN LEVERAGED MARKETS THIS CREATES INCREDIBLE OPPORTUNITY! ALL THINGS BEING EQUAL BULLS AND BEARS ARE STILL NOT EQUAL!
HERE IS WHY:
There are several reasons why, in reality, Bears are categorically stronger than Bulls. In the first instance, this premise goes against what the masses believe, which, in and of itself, effectuates one of the reasons that this is true. Bulls are often falsely led, Bears are much smarter and they never get disillusioned by market sentiment.
To the contrary, Bears prey on market sentiment. Market sentiment often creates weakness. It creates price levels that are not reasonable and often misses the forest for the trees. The strength of the Bull can be traced to the evolution of human behavior. Bulls are much more like the masses and they entice the multitudes to follow them. This is not always a bad thing! As long as there is a foundation for the sentiment behind it, following the Bulls path indeed may, AND OFTEN IS, well advised. Importantly, simply because Bears are stronger does not mean that they control the markets as the Bulls tend to be much more engaged, and hence more emotional, than the Bears.
Bears, however, protect their ground, and all those that tread that ground beware. Bulls, with little enticement often go after anything in sight. These undertakings are often done wildly and blindly. Bulls are easily fooled by the matador (“the enticement”). Bears know the weakness of the opponent and are attuned to when the opponent is overconfident and growing tired.
Bears are backed by the full faith and credit of Gravity!
This is of paramount importance, and often unbeknownst to the masses. What we at The Futures Wizard mean by this is a result of the dynamics of the marketplace itself. Bulls must exert energy, Bulls must maintain that energy, and Bulls are in a constant, yet veiled to the masses, battle against the forces of gravity.
In leveraged markets, if “nothing happens” meaning if there are no “bidders” (a trading sobriquet for one who is “bullish”) prices WILL FALL. In practice, what this means is that it takes buying pressure to raise prices but they will fall on their own weight! The upshot is that Bulls must exert energy and Bears can be either inactive or proactive to win the battle. The forces of gravity are strong and markets tend to fall much faster than they rise.
Bears hibernate, this means that they are not always fighting! A principal behind the fact that bears are stronger than bulls is the premise that a fight is in process. When the bulls come out to fight is when they are indeed stronger.
Bears also possess an inherent element of surprise! Bulls come straight ahead and are always there for everyone to see. This makes them weaker. Moreover, the masses rarely plan for the Bear making the element of surprise exponentially greater. Indeed, there is little planning for the Bear but the masses are easily led to plan for the Bull. Unfortunately, much of what leads to Bullish planning is based on a misapprehension of the markets.
“IN LEVERAGED FINANCIAL MARKETS, THE DIRECTION IN WHICH A GIVEN MARKET MOVES IS IMMATERIAL TO THE ABILITY TO TRADE PROFITABILITY. THEREFORE, PROFITS NEED NOT BE CORRELATED TO ANY NEGATIVE FORCES AFFECTING THE GLOBAL ECONOMY.”
Up or Down? Regardless of the direction, or predicted direction, of any market, the potential for profitability remains unaffected.
In leveraged markets, the mechanics in which a trader profits from either an increase or decrease in price levels is virtually identical in practice.
All profits in leveraged markets are based on the “absolute value” of a given trade. Mathematically, “absolute value” is a fundamental concept. A brief example is illustrative of this important concept:
The absolute value of -1500 (negative 1500) is 1500. Synonymously, the absolute value of 1500 is 1500. In essence, the absolute value is the numeral itself regardless of whether it is denominated in the negative or positive. The end result is that in leveraged financial markets it is mechanically and actually just as easy to profit from a decline as it is from a rise in the marketplace.
At The Futures Wizard there is no need to “fear the Bear.” Where others see danger we see opportunity.
Follow the Wizard The Wizard knows the Future(s), the Currencies, and the Stock Markets.