I've noticed on trading forums this immense passion everyone has for bear markets. I've never traded in a bear market as a disclosure but what is the big deal? Besides 2008 where I don't think a stock bear market was the real issue, the possible collapse of the financial system was the big fear around the world. But if I look at this S&P500 chart(which isn't adjusted for dividends), on a log scale, it doesn't look that impressive. I think the excitement should be what the next leg up will be like. A pullback to 2000-2250 would be a healthy move for S&P. Just wondering where this excitement stems from. Only thing I can think of is a trader sees it as a way to see their equity go up while simple long investors suffer through? *Edit: sorry picture cut off the x-axis, beginning is 1970.
A bear market tends to be high volatility (lots of big up moves and even more so big down moves). Traders' dream! You can make your life fortune from a bear market. I think the most successful speculators throughout history made one or more of their fortunes from a bear market (e.g. Livermore, Soros, Druckenmiller, Tudor Jones etc).
%% True; Mr Livermore also admitted he made more on the long side.He also noted some used envelopes[free] instead of buying note paper.
I actually do take pleasure in that. Specifically, one acquaintance of mine. For a day trader and swing trader and any other player than a long term investor, bear markets or at least uncertainty tend to increase volatility which again means more opportunity to make money. So, that's one very huge benefit.
You make more in vol by calling tops. Specifically 22% on portfolio: https://www.elitetrader.com/et/threads/the-spx-has-hit-a-cyclical-top.325108/
Bear markets and tops are really important for one type of trader - those who can't (or won't) go short. That said, I avoid going short on stocks and stock indices when the equity markets are in bearish mood as the volatility involved in riding a downtrend long-term is just too painful.
%% Bears also can cost more in comissions; but can be worth it. Not everything is going down, SDOW .......is still closing above 50dma LOL+true. Again Mr Livermore, noted he made more on longs, than shorts. Not a prediction, or stock tip.
So you all guys saying bear markets provide more opportunities, but nobody seems to say that they are also much more difficult to trade. Taking advantage of volatility in a bull market is very different than bear market even for day traders. Not to mention day traders have less stocks to borrow and margins get increased. Swing trading is much harder, imho. ET Silverbacks(@Handle123?), please chime in with your experience?