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How to profit from a Crash (Stock Market, Real Estate, etc)

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2 minutes ago, IsaanT said:


For those that don't know, hindsight is a wonderful thing, but we can't trade past movements...

What is the trade opportunity on this chart right now, i.e. from the last bar on the right?  Where would your stop go and what is your target?

 

Be no target. Trade the ma. Parabolic stop. Use a stochastic as an extra filter if want.

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  • Gave up reading OP after a couple silly statements.  He should listed to the gym guy, and invested in RE back in 2004.   If just renting to cover the mortgage & taxes, the appreciation over 20 yrs

  • Thanks. A pity there is no way to maintain wealth when cash and markets are declining- without risking everything.

  • Musk didn't and won't lose anything, until he sells it, and only if below the price 'he received it for'.   Guessing he'll never actually take a loss on Tesla stock    Only thing dropped, is

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10 minutes ago, Harrisfan said:

Be no target. Trade the ma. Parabolic stop. Use a stochastic as an extra filter if want.


Any experienced trader would dissect that statement and realise that you are actually a fantasist.  I assume you dream about playing with the big boys and quote all kinds of theories (some of which contradict others) but it is evident that you have no practical knowledge or experience at all.  And you clearly haven't taken the opportunity to critically examine anything I've said in case it might actually be useful (but that's your prerogative).

I've enjoyed posting things about the markets recently to help others.  I've tried helping you in particular but I now realise that some things are beyond hope so I'll be stopping now.
 

3 minutes ago, IsaanT said:


Any experienced trader would dissect that statement and realise that you are actually a fantasist.  I assume you dream about playing with the big boys and quote all kinds of theories (some of which contradict others) but it is evident that you have no practical knowledge or experience at all.  And you clearly haven't taken the opportunity to critically examine anything I've said in case it might actually be useful (but that's your prerogative).

I've enjoyed posting things about the markets recently to help others.  I've tried helping you in particular but I now realise that some things are beyond hope so I'll be stopping now.
 

Says a guy boosting about a 100 pound win. Big boys. You are kidding.

 

You sound like a beginner. I mostly traded in the 90s. Its boring after a while.

8 minutes ago, Harrisfan said:

Says a guy boosting about a 100 pound win. Big boys. You are kidding.

 

You sound like a beginner. I mostly traded in the 90s. Its boring after a while.


I hope it doesn't appear to be boostful (or boastful).  It's a bit of light entertainment amidst all the gloom.

Back when I was trading the tech shares boom for eight months, my biggest daily gain was £78,000 - it's all about the timing and that trade probably wouldn't have lasted more than a few days.  That was a nice distraction for someone who was at work attempting to complete a complex multi-year project with his team.

Personally, I find making money never gets boring.  I don't accept what you say at all, and nobody else reading this will either.  I'm excited about my trade today but, as specified, I've used mature trading methodologies and principles to increase my chances and managed my risk (to the point that I don't have any now) so my excitement is not fuelled by adrenaline.

I stand by everything I said.

5 minutes ago, IsaanT said:


I hope it doesn't appear to be boostful (or boastful).  It's a bit of light entertainment amidst all the gloom.

Back when I was trading the tech shares boom for eight months, my biggest daily gain was £78,000 - it's all about the timing and that trade probably wouldn't have lasted more than a few days.  That was a nice distraction for someone who was at work attempting to complete a complex multi-year project with his team.

Personally, I find making money never gets boring.  I don't accept what you say at all, and nobody else reading this will either.  I'm excited about my trade today but, as specified, I've used mature trading methodologies and principles to increase my chances and managed my risk (to the point that I don't have any now) so my excitement is not fuelled by adrenaline.

I stand by everything I said.

Good luck

On 4/8/2025 at 3:39 PM, Purdey said:

Thanks. A pity there is no way to maintain wealth when cash and markets are declining- without risking everything.

There is, buy land. They won't make much more of it.

1 hour ago, IsaanT said:

I've explained that I wouldn't use MA's for trading

 

Very odd, but your prerogative. However, tens of millions of traders use the MACD.

39 minutes ago, Cameroni said:

 

Very odd, but your prerogative. However, tens of millions of traders use the MACD.


The devil's in the detail, as always...

MACD can work in a strongly-trending market.  Markets do not trend strongly all the time (look at this week compared with last week, for example).  In fact, the stats show that markets only trend strongly 20-30% of the time.

In a choppy or sideways market they can generate plenty of false signals.

Like any indicator it can be optimised to historical results, making it less reliable for future predictions.

I believe it would work best when combined with other technical indicators (such as volume, RSI, or support/resistance levels) to filter out false signals.  But that wasn't proposed.
 

1 hour ago, IsaanT said:

I've used mature trading methodologies and principles to increase my chances

 

It's all in the song:

 

You got to know when to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run

 

Every gambler knows
That the secret to surviving
Is knowing what to throw away
And knowing what to keep
'Cause every hand's a winner
And every hand's a loser

  • Author
8 hours ago, Mike_Hunt said:

Really?  How did he do that?

Hmmm.

You've never heard of the worst depression since the 30s?

Well 

Your internet seems to be working fine.

Ever heard of something called a search engine?

Now they got that newfangled Chat

Gee Pee Tee. 😄

 

The claim that George W. Bush inflated the cost of housing is often tied to broader criticisms of economic and housing policies during his presidency (2001–2009), particularly in the lead-up to the 2008 financial crisis.

 

Here’s how some of his administration’s actions and the broader environment may have contributed to the housing bubble:

1. Deregulation of the Financial Sector

Bush continued the deregulatory trend from the Clinton era. Key elements include:

Lack of oversight on mortgage lenders and financial institutions, allowing risky lending practices (like subprime mortgages) to flourish.

Financial institutions were able to bundle and sell risky mortgage-backed securities, fueling more lending.


2. Promotion of Homeownership

The Bush administration aggressively promoted homeownership, especially among low- and moderate-income families:

In 2002, Bush launched the “Ownership Society” initiative, encouraging more Americans to buy homes.

This led to eased lending standards and policies that favored increasing mortgage access, even for borrowers with poor credit (subprime borrowers).


3. Low Interest Rates (with the Fed)

While the Federal Reserve is technically independent, during Bush’s presidency, it kept interest rates low in the early 2000s:

Cheap credit encouraged more borrowing and increased demand for housing, driving up home prices.


4. Lack of Regulation on Fannie Mae & Freddie Mac

Though not entirely Bush’s doing, under his watch, these government-sponsored enterprises were allowed to:

Buy up riskier mortgage-backed securities.

Take on more risk without enough oversight, contributing to the systemic fragility.

---

Summary

Bush didn't directly "inflate" housing prices, but policies under his administration — like promoting homeownership at all costs, supporting lax regulations, and allowing riskier lending practices — contributed to the housing bubble.

 

When it burst in 2008, it triggered the worst financial crisis since the Great Depression.

 

  • Author
8 hours ago, Mike_Hunt said:

Yes, look at the trend. 

As I explained, I might have gotten richer by buying RRE and rent seeking...

 

But my life would have been poorer.

 

I would be staying home eating ramen and rice and beans and almost going broke. 

 

No budget for travel.

 

Good for you. 

You've going to die with a bigger pile of money than me.

 

Maybe you can leave it all to yourself in your will. 😃

8 hours ago, IsaanT said:


I wouldn't enter a trade that didn't have a risk/reward ratio.......
 

All very interesting and there are literally dozens of books  that came out  since the net came along. I look forward to yours 

However the fact is the vast majority of day traders lose money. 

On 4/8/2025 at 3:32 PM, SiSePuede419 said:

1. Be Rich. 😄

 

In 2004, I knew the US Real Estate bubble was getting ready to pop when I was at the gym in

[3rd tier American Midwestern beer/furniture/art city] and overheard a fitness trainer talk about how he was going to get rich by buying Residential Real Estate.

 

Unfortunately for me I knew of no way to benefit.

 

There was no way to benefit from the almost certain falling prices of RRE.

 

Which wouldn't burst until three or four more years of bubble expansion in 2007-2008.

 

Ever watched the movie the Big Short?

 

I felt the same way in the 00s.

 

George W Bush inflated the cost of housing.

 

I knew RRE as an investment was a scam.  

 

There's no way to benefit from rising housing prices even if you own your own home, except by moving to a cheaper location or downsizing.

 

It's madness.

 

Made no sense for housing prices to increase faster than average wages.

 

Read about who allowed the fictional securities that allowed personal trainers to buy houses they couldn't afford to "flip" them and "get rich".

 

It wasn't "liberals" or Democrats.

 

RRE was the 00's era Bitcoin Ponzi scheme of the GOP.

 

The GOP screwed Americans.

 

So how can working class people benefit from a stock market crash?

 

Summary: "Not possible" without  risking 100% loss of capital 😀

 

 

Yes, individuals can benefit financially from a stock market crash, though it comes with significant risk. Here are some common strategies:


---

1. Short Selling

You borrow shares of a stock and sell them, hoping to buy them back at a lower price.

If the stock drops, you profit from the difference.

Risk: If the stock rises instead, losses are potentially unlimited.

---

2. Put Options

You buy the right (but not the obligation) to sell a stock at a set price.

If the stock price crashes, the put option becomes much more valuable.

Risk: You lose the premium paid for the option if the crash doesn’t happen.

---

3. Inverse ETFs

These are funds designed to move opposite to a market index (e.g., S&P 500).

Example: If the market drops 2%, an inverse ETF might go up 2%.

Risk: Best for short-term trades; not ideal for long-term holding due to daily resets.

---

4. Buying Volatility (VIX-related instruments)

Volatility tends to spike during crashes.

Traders can use options or ETFs linked to the VIX (Volatility Index) to profit.

Risk: These instruments are complex and can decay in value over time.

---

5. Buying After the Crash

Once prices bottom out, smart investors buy undervalued stocks at bargain prices.

Requires patience and timing.

Risk: Catching a “falling knife” too early can lead to losses.

 

Although they couldn't even floor the bill on insider trading, I wonder how many TRUMP  insiders benefitted with trading when they knew he would give the 90-day break in the tariffs?

1 hour ago, SiSePuede419 said:

As I explained, I might have gotten richer by buying RRE and rent seeking...

 

But my life would have been poorer.

 

I would be staying home eating ramen and rice and beans and almost going broke. 

 

No budget for travel.

 

Good for you. 

You've going to die with a bigger pile of money than me.

 

Maybe you can leave it all to yourself in your will. 😃

Quite the opposite.  Investing in RE put a lot of money in my pocket, to travel, pay off mortgages early, and retire 20 yrs earlier than most people, while enjoying a great life.

 

Financial independence is awesome, stress free living, and it simply doesn't get any better than that.  

1 hour ago, Jim Blue said:

However the fact is the vast majority of day traders lose money. 

 

I couldn't agree more.  It's a fact I've pointed out here several times.  The stats show it's 71% of retail traders.

I noticed your comment a few days ago about your own position.  I hope last night's rebound is not interpreted as a recovery because the foreseeable trend is still down.
 

11 hours ago, IsaanT said:

This one's primarily for @Harrisfan, @Yagoda and @Cameroni but may be of interest to others.

There are trading opportunities in all markets - even volatile ones like these.

I saw an opportunity this evening so I couldn't resist.  I'll explain the rationale behind it.

image.png.75c2c01a69bbfc93419e3ca50fc1a178.png

Above is the 5-minute chart of the Dow.  I'll come back to this in a minute.

image.png.dec847d8e6bc9b03a9b63cd9b765e81d.png

 

This is the daily chart for the Dow.

Rationale Explanation

There are turns (big and small) in the markets every 8 days on average (I did state recently that sentiment and TIME drives markets...).  We've just had 7 days down from the minor top on 26th March and two days of movement up since then.  I'm counting 26th March as one of my minor turns and Mondy as a turn back up again.  N.B. Sundays don't count on the futures markets - they're not a trading day.

I should hasten to point out that there are 8 days between turns as an average (as already stated) and can be as low as 1 day or higher than 8, but not by much.  You have been warned.

Taking the recent bottom (I used Sunday's bottom for extra safety), I then did a Fibonacci retracement on the 1-hour chart (see below).  Most people think about 62% or 78% retracements but these are volatile markets so there are two higher numbers that I like - 88.6% and 94.1%.  If you're interested I'll explain where they were derived from but back to the plot...

You'll see that the retracement from Sunday night has just about hit the 94.1% line.  Furthermore tonight, when I was looking at it, there was an apparent move starting up which had also retraced 94.1% (see the 5-minute chart above).  I opened a buy with the stop at Sunday night.

Also, the divergence in the stochastic on the 5-minute chart was very much in my favour (see below).  Reminder - a momentum indicator like the Stochastic usually goes up when the market is going up, and vice versa.  However, the last few bars on the 5-minute went almost as low as the preceding low nine bars to the left but the stochastic has diverged and is much higher, indicating a potential turn.

image.png.e5d3d7c76e20bcdd9222601637992dd1.png

The Important Bit

This is just a bit of fun so I have £0.20p per point.  My guaranteed stop would have cost me £30 if I got it wrong so I'm not in big time.

Secondly, my target is over 2,000 points higher so the screen told me my risk/reward ratio for this bet was 1:6.3.  Let's just talk risk/reward for a moment.  No-one gets all trades right so, to make money overall, your wins have to be bigger than your losses.  So, if you have a 66% win ratio, you'll get two wins for one loss.  Your risk/reward ratio has to be considerably bigger than 1:1, e.g. 1:2 would be enough, i.e. twice as much on a win than you lose if you hit the stop.

What is my target?  Well, I think the last couple of big bars (Monday and Tuesday, red, then green - see daily chart) are forming an ABC EW retracement.  If so - and the C wave doesn't stop prematurely, the market should rise above Tuesday's high (the top of the A wave).  Typically, it should go higher but, just in case it does and then goes back down again while I'm asleep tonight, I've set my target to close at 39,471.

And the best bit?  The market did move up within minutes of opening the trade and, if I'm right, won't revisit the starting position again before this move is over, so I've moved my guaranteed stop up to the open.  I'm presently £103 in profit as I write.  I cannot lose anything now but stand to gain about £250 if I'm right.

I hope this helps.  If anything is unclear, just ask.
 

Yeah, when the market drops, buy.

  • Author
10 minutes ago, IsaanT said:

I couldn't agree more.  It's a fact I've pointed out here several times.  The stats show it's 71% of retail traders [lose money].

At the office cooler...

 

COWORKER: I make more money day trading than working here.

 

ME: No you don't.  If you consistently made more money than you did as an hourly employee, you'd be managing your portfolio, not picking up crumbs here.

 

COWORKER:  ...

 

Most of my coworkers actually prefer working remotely. 😄

  • Author
21 minutes ago, Yagoda said:

Yeah, when the market drops, buy.

The 2008 Republican Crash lasted 8 months.  I bought on the way down and it kept going down.  After I exhausted my cash reserve and was 100% invested and it kept going down? 

 

Sinking feeling in my stomach.

 

Of course it bounced back within a year.

 

But that's because we had a Democrat in power.

 

The Stock Market always goes up under Democrats. 👍

The Stock Market always crashes under Republicans.

 

 

It's one of those Rules of Thumb you can use throughout your entire life.

 

Ain't no Democrat on the horizon in 2025.

 

We're walking through the Valley of the Death Cult for the next 4+ years.

 

It's going to be a long, hard slog. 🫣

Ea5DrciWkAA6pxZ.jpg

  • Author
1 hour ago, KhunLA said:

Financial independence is awesome, stress free living, and it simply doesn't get any better than that. 

You should give your Rel Etate Git Rch Quik seminar to folks at a Dallas hotel

(E.Z. get-away) 😄

 

You'll probably make more money giving a seminar than you would doing what you claim is easy during the seminar.

 

Took one of those in the 80s.  The guy who gave it died with about $8M in assets and $34M in debt.

 

Real Estate.  You gotta tote the note.

Note = debt

 

Not risk free, can lose everything plus more.

 

His widow and kids had to leave their mansion as it got foreclosed on and took the next Greyhound  out of town.

 

All that glistens is not gold, partner. 🤠

 

 

41 minutes ago, SiSePuede419 said:

The 2008 Republican Crash lasted 8 months.  I bought on the way down and it kept going down.  After I exhausted my cash reserve and was 100% invested and it kept going down? 

 

Sinking feeling in my stomach.

 

Of course it bounced back within a year.

 

But that's because we had a Democrat in power.

 

The Stock Market always goes up under Democrats. 👍

The Stock Market always crashes under Republicans.

 

 

It's one of those Rules of Thumb you can use throughout your entire life.

 

Ain't no Democrat on the horizon in 2025.

 

We're walking through the Valley of the Death Cult for the next 4+ years.

 

It's going to be a long, hard slog. 🫣

Ea5DrciWkAA6pxZ.jpg

Got it. Your screw up in the market has warped your vision of life. Its everyone elses fault, especially the big orange nightmare.

 

You sound like the loon  continually spouting  off about Trump here because of real estate deals 40 years ago.

 

You life will be better when you admit your life mistakes, focus, take a deep breath and get some education

27 minutes ago, SiSePuede419 said:

You should give your Rel Etate Git Rch Quik seminar to folks at a Dallas hotel

(E.Z. get-away) 😄

 

You'll probably make more money giving a seminar than you would doing what you claim is easy during the seminar.

 

Took one of those in the 80s.  The guy who gave it died with about $8M in assets and $34M in debt.

 

Real Estate.  You gotta tote the note.

Note = debt

 

Not risk free, can lose everything plus more.

 

His widow and kids had to leave their Manson on the next Greyhound bus back to Grandma's house.

 

All that glistens is not gold, partner.

Any investment has risks.   Though RE is about the lowest risk investing I can think of ... IMHO.

 

You have to live somewhere, and owning long term will usually beat renting.   When I bought my first house, large 4 bdrm on a double lot (suburbia) I wasn't thinking slumlord.  Although that changed quickly.

 

Took on a roommate for the added income, and his rent cover the mortgage.  That was bright lightbulb going off in the brain.

 

So pulling a Ray Croc, and duplication is the way to success, turned the single family house, I didn't need, into a triplex while living there.  After a year, Rented out the 2 finished apartments, while living in the unfinished apartment (basement), collecting & saving rent.

 

Bought another fixer upper, rented out the basement apartment, those three paying both mortgages, while I fixed up the other house.  That done, bought another house, with cash this time, as the four units paid for everything.  

 

Within a couple years, I was rent free, and a few more years, I was mortgage free.  At that point, I was complete financially independent.  

 

Along with being self employed, 4 different businesses, and still had too much time to myself.   So travel bug hit me, and what better way, than to go back to work for airlines, after an 8 yr break.  Applied at 2 airlines, the only 2 that allowed beards, and both hired me.  Went with the better paying full time offer, NWA vs USair.

 

Saw the rest of the USA on the cheap, along with international traveling, by only working 2 full days a week, after a few years of full time.

 

Living the Dream #1

Now retired, Living the Dream #2

  • Author
1 hour ago, Yagoda said:

Your screw up in the market

More Wifebeater victim.

Don't think it was me that imposed tarrifs last week and crashed the economy. 😄

2 hours ago, SiSePuede419 said:

At the office cooler...

 

COWORKER: I make more money day trading than working here.

 

ME: No you don't.  If you consistently made more money than you did as an hourly employee, you'd be managing your portfolio, not picking up crumbs here.

 

COWORKER:  ...

 

Most of my coworkers actually prefer working remotely. 😄


Absolutely right.

I only know one guy who makes a consistently comfortable living from trading at home as his sole source of income.  Maybe I should get out more. 😉
 

1 hour ago, Yagoda said:

You life will be better when you admit your life mistakes, focus, take a deep breath and get some education


That's sound advice we can probably all use. 👍

8 minutes ago, SiSePuede419 said:

More Wifebeater victim.

Don't think it was me that imposed tarrifs last week and crashed the economy. 😄

Oh? The economy crashed? Got it. Trump hate madness, to use a term coined by a Trump hater.

1 minute ago, IsaanT said:


That's sound advice we can probably all use. 👍

Try it, you will like it. Brings folks back to reality

5 minutes ago, IsaanT said:


Absolutely right.

I only know one guy who makes a consistently comfortable living from trading at home as his sole source of income.  Maybe I should get out more. 😉
 

Only one?

 

Girls have OF, boys have Day Trading

12 hours ago, Harrisfan said:

Good luck


Thank you.

My position closed sometime in the early hours, for the profit of £253, as expected.  I actually had to re-open an old spread betting account to make this trade because I haven't traded for many years.

Summary:
£200 seed capital in account (the margin on the trade was £184)
£30 risked for the early part of the trade (30 minutes)
£453 now in my account (a trailing stop might appear to have been better but they often whipsaw you out of a position before you get to your original target, so I'm satisfied with how it went)

image.png.554d3a35e2dae782380afd68142ca986.png

The markets are not entirely random.

p.s. Spread betting is a UK-only opportunity.  They're like CFDs but profits are tax-free.
 

  • Author
48 minutes ago, Yagoda said:

Oh? The economy crashed?

No.  Only $6.6T lost in a two day romp.

People will pull back.

It will take months to ripple through the economy.

It took about 2 years before I noticed the economy cratering out in 2010 after the 2008 Bush Crash.

The US economy is a giant ship not the little fishing boat you're used to. 😄

1 hour ago, Yagoda said:

Try it, you will like it. Brings folks back to reality


My reality is our two adopted young Thai brothers.  That's a reality we enjoy.  Giving tops receiving any day of the week.
 

 

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