The stock market is a constant struggle between bulls and bears. Most people prefer to play the upside of a stock rather than the downside. That strategy may work well in rising bull markets but often gets crumbled when stocks crash.
There are advantages to shorting just like there are advantages of buying every trader needs to figure out which strategy works best for them.
The advantages of being a bear
1. Stocks often go down faster then they go up. This means it is possible for you to make faster and bigger gains by playing the downside of the market.
2. Playing the downside can help you make money when there is a bears market. This could be a good alternative to watching your bullish positions lose money. Remember bear markets make millionaires too.
3. Jessie Livermore who was considered the best trader of all times was considered a bear. He made fortunes when the markets were heading down and would be a billionaire by todayâ€™s standards.
The advantages of being a bull
1. The market is bullish much more then it is bearish. Buying strong stocks can help you to take advantage of this type of market.
2. Bulls do not have to sell. If you have a stock that you are bullish on you can buy it and hold it forever. This is different from shorting in which at some point you have to buy the stock back and return it.
3. The majority of traders and investors are bullish. If the majority of the people are playing the upside it is more likely that over a longer term timeframe the market should go up.
4. Warren Buffets made Billions by being a long term bull in the stock market. If you have plenty of time to let your money grow it could be a good thing to become a bull.
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