How to play the market correction

One of the first things I learned as a market analyst many years ago was that most retail speculators spent way too much time trying to predict market corrections, and far too little time focusing on making money is trending markets.

So what is the best thing about market corrections for currencies and stock indices? Answer: history tells us they always lead back to a resumption of trending markets.

So taking the answers from those two questions, we realize that while it is unlikely that we can predict a market correction, it is obvious that when one does occur it is a good idea to prepare for a resumption of the predominant trend. This is why professional fund managers and traders focus on buying into asset class markets which are accumulated by pensions and other institutional investors, and wish to avoid the volatility that accompanies major corrections.

The bottom line: over time you will be better rewarded for buying dips in uptrends and selling rallies in the occasional downtrend than on focusing on trying to predict and capitalize on the timing of price corrections.