The arrival of an economic recession will make trading on the stock market much more complicated from now on. Where only investors who have more learning in these movements or those who opt for the trading operations they will have the opportunity to achieve capital gains in the equity markets In any case, and to be more positive, it must be remembered that business opportunities are always generated in the stock market. Even in the most adverse scenarios for the financial markets.

On the other hand, it must be emphasized that this new scenario will require small and medium investors to be more adept at developing their investments. Where it will be essential to be much more selective that up to now in the choice of securities that will make up the portfolio. Although in any of the cases the supply of this class of securities is going to drop substantially. There will be very few who should be on our radar of operations.

In the event of an economic downturn, as the latest macro data is showing, the selective equity index may head to levels not seen in recent years. It would not be surprising to be direct up to 7.500 points or even demolish the psychological level that it has at 7.000 points. In any case, the fall will be very important and will affect any investment strategy. In other words, from now on it will be much more complex to make a successful return on the capital invested in the financial equity markets.

Short bearish movements

One of the keys to the success of the operations carried out in bearish movements is that they are directed to the shortest possible permanence periods. It's a the only way collect rebounds that are produced under this trend. These upward movements do not have a specific duration since they can last a few days or extend into a few weeks. Depending on the intensity of the same and the buying pressure that develops in those days. Therefore, it does not make sense to extend the terms because in the long run we will always lose out in our positions on the stock market.

On the other hand, in short-term periods we can always make a profit even if the underlying trend is clearly downward. That is, we can take advantage of this little trick in the equity markets to get a few euros that will go to our savings account each time this movement is positively executed in the stock market. It is one of the few self-defense mechanisms that small and medium investors have to come out alive from their attempt to invest in the financial markets. In addition, it is a strategy that is not excessively complicated in its application.

Loss limitation order

This is not a formula to make our savings profitable. If not on the contrary to try limit possible losses that our investment can bring us. Especially in deep downward movements because we can eliminate a very important part of the invested capital. Because equity markets can be falling for many months or even years. It is necessary to avoid by all means that this unwanted situation arrives on the part of small and medium investors. In an attempt to preserve our money above other technical considerations.

While on the other hand, we must also stress the fact that downward movements in the stock market are more likely to develop operations that in the end we will have no choice but to settle them with poor sales. In order to get liquidity in the face of some need in the domestic economy of stock users. For example, the amortization of a line of credit, debts before third parties or face the most necessary expenses in daily life. Well, in this sense, a loss limit order can help you make your losses in the stock market not more bulky. It will always be better to keep 2% rather than 10% or 20% of the investment.

In very liquid values

Another key to surviving in an adverse scenario for the equity markets is to carry out stock market operations only in securities that offer high liquidity to investors. With a double objective, on the one hand that they can adjust the entry and exit prices on the stock market to their liking. And on the other hand, to prevent them from get hooked in their positions as a consequence of their low liquidity. Normally, this class of stock values ​​coincide in their objective with those with the smallest capitalization and that are listed in the secondary indices of the national equities. For example, Deoleo, Sniace or Natra to name just a few representatives of this very special group of listed companies.

On the other hand, securities that are very illiquid also generate problems for you that they can be manipulated with very few securities. To the point that they can move them with great violence, in one direction or another and generally in charge of strong hands of financial markets. Where the small and medium investors themselves have very few self-defense mechanisms to preserve their positions and consequently are in a position to lose a lot of money in each of the open operations. You may have been the victim of such a movement yourself.

Caught in the positions

In addition, it must be valued that in the face of a lack of liquidity it will always take longer to execute sales with the consequences that this action can generate among investors. As it can happen that you do not sell your shares at the prices you want. If not on the contrary, you are forced to cross an unwanted change at those moments. In practice, it can make a difference of many euros in operations and therefore it is not worth hiring them due to the many damages that it can create from now on.

Not surprisingly, you can not forget that these values ​​are very speculative and are intended for other strategies in investing in the stock market. With an obvious risk that your securities portfolio may devalue in the coming weeks or in a very few days of trading, as is characteristic of these stock market proposals.

How to go against the current?

In bearish movements, it is evident that values ​​are carried away by the inertia of the markets. Which in practice means that it is much more difficult to detect values ​​that are under an upward trend or at least lateral. With which you can get a profitability around 10% profit in operations. Therefore, there will be no choice but to apply certain investment strategies. With the aim of improving the results of all our operations on the stock market in this scenario so little desired by small and medium investors.

Among the systems for trading on the stock market there are some that may be more useful to satisfy our needs with the always complicated world of money. Thus, there are some guidelines for action that may be more profitable than others. From this scenario, we are going to propose you some simple tricks to get the most out of the stock market in an adverse scenario for equity markets such as the one forecast for the coming months.

Guidelines for action

The first standard of action should be to position yourself in values ​​of clear Uptrend. Of course, there will be some despite the fact that the falls in the equity markets are widespread. Business opportunities are always present at any time, as investors with more experience in this type of operation know.

Another strategy is to opt for stocks that have a higher upside potential. Not all will show the same constants and with all certainty that there will be some other value, which for different reasons, has higher expectations in growth. It is precisely these stocks that should make up our portfolio at the most difficult times for equity markets. Where you can obtain benefits in operations as has happened in other downward movements in the stock market.

Another very useful system that we can apply from now on is the one that has to do with making new purchases at the same value. That is, the commonly called buybacks and that they are used in periods that are destined to the medium and especially long term. With the primary objective of buying them at very low prices so that over the years they can obtain profits in the operations. Among other reasons because the positioning of investors will be much higher than before. This in practice means that you will have more shares and therefore will have more capital invested in the stock market.