How to Avoid Assets Going to Zero in a Bear Market

A bear market is not the end, but a filter. Some lose everything, others grow stronger in adversity. The difference lies in the response strategy.

Survival Rules

1. Avoid Mindless Trading
If there is no clear trading logic, do not open positions. In a bear market, any reckless operation will be punished twice as hard. Better to miss out on volatility than to get liquidated and lose money.

2. Strictly Control Position Sizes
Volatility increases, liquidity decreases. Strategies that work in a bull market can be deadly now. Reduce the risk of each trade by at least half.

3. Refuse to Add Positions Against the Trend
"If it drops again, I’ll add more, it’s cheaper anyway," this is the graveyard of retail investors. There is a reason for asset declines; don’t catch falling knives empty-handed.

4. Maintain Cash Reserves
Cash is also a position. The most valuable opportunities in a bear market are always reserved for those holding bullets. Never go all-in and lie flat.

5. Keep Rational Decision-Making
Emotions are the biggest enemy. Trying to recover losses after a downturn or aiming for quick riches after profits can easily lead to liquidation. Stick strictly to your trading plan and stay away from impulsive actions.

Core Principles

The goal of a bear market is not to get rich quickly, but to preserve capital and wait for opportunities. Those who survive the cold winter will dominate the market in the next cycle.

Patience is also a strategy!