Someone Always Makes Money In A Crisis

I’m sure you’re probably sick and tired of hearing all about sub prime mortgages, foreclosures, impending recession, and the end of the world!
Mainstream media will have us believe that we are all doomed because of the actions of a bunch of renegade bankers.

While there is no denying that the economy is in a downturn, it’s important to remember that in a crisis, any crisis, somebody somewhere is making a lots of money. Why shouldn’t that somebody be you?

In the last few weeks, as the crisis has been deepening, I have made more money than in the many months leading up to here. In this article, I want to share with you how I achieved that. It’s not rocket science, and I really believe that anybody can make money from this crisis if they know what to do.

How To Profit From The Credit Crunch

So how have I managed to make money from an apparent financial meltdown? To answer that question, first you need to understand how I make money in normal times.

I am a day trader. That means I buy and sell stock in companies, for profit. You may think that sounds like a risky proposition, especially in today’s climate, but actually the risk is very much controlled.

Let me explain further. Much trading activity takes place over a longer time frame. For example, a pension fund will probably invest in company stock over a period of many years. Historically, over the long term, stock prices rise. But in the event of a crash as we are seeing right now, these funds lose huge amounts of value. In other words, they are exposed to lots of risk.

As a day trader, any stock I buy, I always sell back again the same day. When I go to sleep at night, I am not holding any stocks or shares in any companies. It doesn’t matter to me if the companies I was trading in collapse overnight, I have no financial interest in them, and therefore carry no risk.

In normal market conditions, I can usually make between $1000 and $2000 a day. It only takes about three hours and work per day to generate that kind of income from day trading.

With the sub prime credit crunch, and its effects on global markets, stock prices are even more volatile than normal. That means where prices might have gone up or down by, say, $1 a day, now prices are moving by as much as $4 or $5 a day - sometimes even more. So in these times I am able to make even more cash by doing exactly the same thing I do normally.

If all this sounds complicated, don’t worry, it’s not. In fact, day trading is actually quite simple. You only need to know three things to make money day trading stocks:

1. Which stocks to trade. In normal circumstances, selecting stocks to trade can take about one hour of work a day. However, in the markets we are seeing right now, there is no work required - the stocks that are moving the most are banks.

2. When to buy the stock.

3. When to sell the stock.

As I mentioned, in the current climate, my workload is actually it reduced because I don’t need to spend any time on step one. I just make sure I trade mainly banking stocks, because I know that they are going to make more profits for me.

Steps two and three work exactly as they always have done, but because the markets are moving more, by doing the same thing, there is more profits to be made.

To see an example of how this works, have a look at the video below. It is only a few minutes long, but it will show you how I make money from day trading:

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Why You Should Consider Day Trading

I strongly believe that everybody should have at least two sources of income. If you have a full-time day job, you already have one source of income. But if you lose that job, you need a backup plan. As recession looks ever more likely, so job losses are likely to increase. What is your backup plan if you lose your job?

I first started learning to trade when I still had a job. Once I was profitable, my day trading income quickly overtook my salary. What had started as my backup plan, was earning me more money than my full-time job, and it only took about one quarter of the time. As you can imagine, not long after that I quit my day job!

There are all kinds of backup plan you could have alongside a job. You could set up a business selling on eBay. Or you could start making home-made jam and sell it by mail order. Or you could take in a lodger and charge rent. The trouble with these, and most other methods of generating income, are that when times are tough, people spend less money, so as backup-plans they are likely to produce worse results just when you need them the most!

Day trading is different. You don’t have to rely on customers spending money with you. You don’t need to advertise. You don’t need to sell. In good times and bad, there is always money to be made in the markets.

Learning to trade takes a little bit of time, a fair amount of discipline, and a lot of patience. The reward is a skill that you can call on for the rest of your life to generate income almost at will. And when a crisis comes along like that which we are currently experiencing, instead of worrying about losing their job, the day traders are the ones who are profiting from the situation.

If you would like to know more about trading, you can download my free report “How To Make More Money, Working Less Time by Day Trading” by filling in the form on the top right hand side of this page.