Trading in a Down Market
It used to be that in down markets you simply would pull your money out of the marketplace and wait for prices to start rising again before you invested more money. This is an outdated mode of thinking; you truly can make money in the Forex market regardless of what the dollar is doing price wise. This goes for both bull and bear markets.
If the dollar is dropping in price, don’t despair. Instead, prepare to make some serious cash by using the elemental trader. By selling the dollar short and buying a currency that is on the rise, you can stake a claim and weather out the turbulence that the dollar is facing. This means that you have enough capital outside of the Forex market to get through your daily living. If you have to pull money out of the Forex market to survive, you should not be trading with such a large amount.
Selling the dollar in a poor market and investing in a currency that is increasing in price is a great way to increase your long term cash flow. When the dollar starts to rise once again, you will have much more money to trade with since the currency you chose hopefully increased quite a bit in value during this time period.
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This does not mean that you should stop trading completely during bear markets. Rather, as other currencies around the world will fluctuate, you can trade cross pairs and grow your money without ever going back to the stagnant U.S. dollar. This is a bit riskier, so make sure you are well aware of what you are doing should you choose this strategy.