Markets Crashing: What You Should Do
Traders are getting scared. Life savings are lost. Cryptos are down massively. It was fun while prices were rising but now you need to know how to trade.
Matthias Hagemann
Trading Strategy
I’ve experienced three bear markets in my career: the dot-com bubble, the financial crisis and now 2022. I witnessed them unfolding in real-time. Each time, the world appeared to be coming to a standstill.
Stock Prices Exaggerate All the Time
In early 2020, valuations were already high but everyone was shut up at home and forced to use the internet more — even those who weren’t internet-afficionados. That meant more ecommerce, more food delivery, more video, more games, more cloud. The pandemic showed how much bigger digitalization could become.
Now everyone goes back to work and everyone is desperate to walk into an actual shop, eat in a restaurant with friends, or fly to a holiday destination. But we’re not going backwards. We will stumble forward. People will keep doing more online. More opportunities are coming your way and the Nasdaq-100 will remain the best index to invest in.
The older I get, the more I appreciate how valuable a long-term historical perspective can be to understanding markets and trading. Markets get irrationally greedy or fearful regularly but you can navigate these mood swings accurately.
How to Profit When Markets Crash
Easy. Short futures contracts.
It’s times like these when you wished you could protect your investment portfolio with hedging signals. Hedging means that you short futures contracts. While stock prices drop, your portfolio suffers but your hedge will balance out those losses. That’s what I’ve diligently worked on over the many years.
Each market cycle has further enhanced my trading system. I use it for hedging a large portfolio during market corrections and to build equity over the long term.
On April 8, I issued a warning to my students and asked them to go short when the Nasdaq-100 was still trading at 14,417 points. The gains on this short position are north of 2,500 points. Those who followed me are making $51,115 per NQ contract. In other words, we’re up while markets are getting trashed.
A rising tide lifts all boats but you only find out who is swimming naked when the tide goes out.
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About Matthias Hagemann
I share my 15+ years of trend following experience. Aspiring traders come to me because they want to make consistent profits without stress and without day-trading.