How to Invest Smartly During the Bear Market

It is official: we are in bear market territory. What started with the crypto market’s gradual drop after a prolonged effort to surpass the $2.5 trillion resistance point, has now expanded to the stock and commodity market. With high inflation, global shortages, and interest rate highs becoming the norm, wealth management is becoming an increasingly pressing concern for many. Technology is making this easier than ever, allowing anyone to analyze the market and act on hard data.

While bear markets are known to generate anxiety in investors, making many of them flee, they also represent a unique opportunity. The famous expression “buy the dip” has a lot of wisdom to it, as those playing the long game can benefit even more than during a bull market. However, it all depends on predicting which companies or projects will actually bounce up. Here is where strategies like “Technical Analysis” play an important role, allowing them to identify opportunities based on price trends and patterns.

Unfortunately, technical analysis has historically required technical proficiency in reading charts and creating indicators, which makes it difficult for beginners. However, platforms like Lux Algo have emerged as a means to facilitate technical analysis by providing solid indicators and useful features for traders of all levels to make better decisions. Candle coloring, dashboard data, automated alerts, settings optimizer bots, support & resistance, and institutional activity, are only some of the features the platform offers.

Lux Algo is the brainchild of Sean Mack & Alexander Friend, who co-founded the Boston-based  company back in 2020 with the mission to bring clarity to “help people participate in financial markets smarter.” Over these 2 years, the company has launched a platform which works in tandem with TradingView’s powerful charting tools. By separating noise from meaning, the platform has made it easier for thousands of traders to deal with technical indicators.

As a community-focused project, Lux Algo has over 50 open-source scripts that can be audited by users to provide feedback, report bugs, and integrate with other platforms. This means that while Lux Algo has a strong emphasis on beginners, veterans can also integrate its indicators into their own toolbox.

Using tools like Lux Algo during this bear market is one of the best and easiest ways to perform technical analysis. While beginners might want to start with basic strategies like support & resistance, simple moving averages, and relative strength indexes, it is important to educate yourself to use more advanced indicators. If you are new to technical analysis, Lux Algo offers great resources ranging from introduction to advanced indicators.

However, performing the technical analysis (or any other form of analysis for that matter) is only a part of the equation. While these tools will allow you to make a sound prediction on how an asset will perform in the long term, they won’t tell you how to invest in them. If you are the kind of investor who is looking for short-term profits by day trading or similar strategies, you should avoid investing during the winter.

To increase your chances of making a profit in the mid and long term, the best any investor can do is stick to the basics: Diversify, keep up with the news, keep a cool head, reassess your risk profile, and stick to the investment plan. However, the most important thing is to be prepared for the worst, and as such, the best time to deal with a crash is before it happens.