If youare serous about making consistent profits in the markets, you want to be able to profit in any market enviroment, not just when stocks are rising. I am often surprised by how many people approach me and tell me they are interested in a trading career but have no experience selling short. More shocking is that they have absolutely no interest in selling short.
This potentially cuts these long-only participants's opportunities in half. Though I have done no independent verification of studies, it is said that bear markets occur every 39 months on average and that they typically last for about 18 months. That is a lot of time where the odds are stacked against long trades and where selling short makes sense to generate market profits for the purpose of current income.
Bear markets bring about a retun to realistic expectations after an "easy" bull market sends participants' confidence levels soaring. It is said that bull markets will bail you out of careless trades, while bear markets will punish any slip of discipline. Bull market traders are reminded of the fact that stocks are risky in a bearish environment , whil disciplined and flexible traders continue to rack up profits as price decline.
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