CFD affiliates are accustomed to making high profits during good market conditions, but many become nervous at the thought of a bear market. Skilled CFD affiliate marketers can earn high commissions in any market condition and are unpassed by economic downturns. We’ll take a closer look at today’s economy and how to develop the agility and flexible mindset to continue profiting as a CFD affiliate.
What is a Bear Market?
A bear market is trader slang for any market experiencing a prolonged downturn. A bear market is the opposite of a bull market, where assets consistently gain value. There’s no precise definition of exactly what constitutes a bear market, but there are three general conditions:
- A market falls in value by 20% or more from previous highs.
- The fall is an ongoing trend rather than the result of temporary volatility.
- Trader and analyst sentiment is generally negative, and experts are pessimistic about the chances of a quick upturn.
The term bear market can be applied to a specific asset like Oil or a national currency and to an entire asset class like the stock market. In the event of a national or global recession, the term bear market can collectively cover all the financial markets. Bear markets can occur as major corrections (usually caused by government policies or central bank decisions) or long-term bear markets that are caused by unsustainable market imbalances. Long-term bear markets can continue for at least a year.
How to Identify a Bear Market
To make money as a CFD affiliate marketer, you need to be attuned to market conditions and trader sentiment. You also need to understand how media reports affect public opinion and influence people considering trading online for the first time.
CFD affiliates don’t need to be economists or financial experts – or even traders – but you do need to keep your finger on the financial pulse. You need to learn how to identify a bear market quickly and accurately to be able to adjust your marketing campaigns in a timely fashion.
If you want to succeed as a CFD affiliate and earn a consistently high income, you need to move with the markets, not follow behind them. You’ll be unbeatable if you can anticipate market changes and devise a range of flexible affiliate marketing strategies!
1. Know Your Broker
You need to know your broker inside out. Familiarize yourself with all the different asset classes and the entire asset index. Too many CFD affiliates focus on a few asset classes like forex, cryptos, and stocks and don’t aggressively promote commodities, bonds, ETFs, indices, and options. Even in a booming economy, you’re missing out on commissions when you neglect any financial instruments. These overlooked asset types will earn money for any astute CFD affiliate marketer in a bear market.
2. Follow the Financial Markets
To run an affiliate business, you need to follow the financial markets. A successful farmer is a good analogy; he pays close attention to his soil quality and weather reports. A CFD affiliate marketer studies the markets and the financial press similarly. You don’t have to turn financial news analysis into a full-time job, but there are three basic levels of research:
- Market news and trends specifically relating to asset classes that you currently promote.
- Market news and trends relating to asset classes that you should consider promoting.
- A general overview of the global financial markets and relevant national economies.
The best strategy is to allocate a certain amount of time each day to reading and reviewing the financial news. It pays to operate efficiently and not to use up work time that you should be devoting to your affiliate marketing campaigns, website management, SEO research, and content production.
Experienced CFD affiliate marketers have a list of financial news resources that provide easy-to-read summaries and analyses of financial news. It’s also worth signing up for news alerts and bulletins. Even Google Alerts can be a big help. If you’re running social media campaigns, you should already be monitoring the financial headlines as a matter of course. A good tip that too many CFD affiliates overlook is to sign up for broker newsletters.
Will there be Bear Markets in 2023?
2022 was a rough year for many industries and financial sectors, and the pessimists say that real problems are just beginning. Reuters called a bear market on June 13th when the S&P 500 closed 21.8% down on January highs. Some analysts regarded this downturn as a reaction to Fed interest rate adjustments and predicted a quick bounce back. So far, it isn’t happening.
The unusual financial conditions following the global COVID-19 pandemic and lockdowns certainly left a lot of economists confused. There is, however, a consensus that the global economy is rapidly sailing into troubled waters. There are widespread predictions of recessions in 2023 and a sustained bear market. Inflation seems to be with us for the foreseeable future; there is a global commodity and energy crisis, predicted food shortages, and a deeply worrying war in Ukraine.
Nobody has a financial crystal ball, and even the most successful investors are operating on the balance of probabilities based on previous market performance and their assessment of the current market and geopolitical conditions. It’s possible to predict a future market scenario built on good data analysis and outwardly entirely logical – and still be completely wrong.
Nonetheless, suppose you plan to earn money as a CFD affiliate in 2023. In that case, this is an excellent time to explore new assets, more diverse trader demographics, and out-of-the-box marketing strategies. The best advice for 2023 is to plan for the worst and hope for the best. The top-tier earners in the world of CFD affiliate marketing know precisely how to identify a bear market and are prepared for a long-term downturn.
How to Profit From a Bear Market
A bear market doesn’t have to be bad news. If you’re adaptable and understand CFDs’ potential advantages, you can keep profiting as a CFD affiliate. It all depends on your ability to connect with high-value traffic and communicate your message clearly and persuasively.
5 Key CFD Advantages in a Bear Market
- Traders can open CFD trades on assets that are declining in value. You don’t need bullish upward trends to make money from CFDs. CFD trading can be profitable even in the most challenging bear market.
- Although CFDs are risky, successful trades are highly profitable. Good brokers provide automated risk management tools to help traders to reduce potential risks and trade more efficiently.
- CFD trading is simple, transparent, and convenient. A significant advantage for traders is that if a trade fails, their losses are restricted to the funds they invested in that trade.
- It’s possible to open CFD trades on a wide variety of assets. Even in a long-term bull market, some asset classes (or individual assets within classes) will remain volatile. Others will enjoy stability, even if they yield low profits. CFD traders can follow the markets and cherry-pick assets with good performance or potential.
- Even during a bear market, there will inevitably be some volatility with minor upward trending. Positive movement and timescales may be restricted, or the markets may enter whipsaw territory, but there will be some brief trading opportunities. CFD trading (particularly with automated orders) is simple and agile enough to exploit these market conditions.
One characteristic of recessions and harsh economic conditions is that there can be a loss of confidence in major financial institutions. Many people start looking for additional income streams or decide to manage their finances and investments.
An effective CFD affiliate marketer will identify these demographics and connect with them – primarily via social media. Your success rate will depend on the quality of your educational materials and your ability to explain the pros and cons of CFD trading.
Join a Professional Partner Program
Bear markets are generally more challenging for CFD affiliates than bull and boom economies. You can still earn high commissions – the partner programs are more than happy to pay for new traders – but you’ll need to work more skillfully and explore new affiliate marketing strategies.
Joining a genuinely professional and highly experienced partner program will also increase your chances of earning high profits during a sustained bear market. AvaPartner has been in operation for over a decade and has seen plenty of bear markets come and go. It has the experience, the resources, and the know-how to work with affiliate partners in all market conditions.
You can sign up with AvaPartner today and negotiate a tailored commission plan to deliver optimal revenues, even if the current market conditions continue or deteriorate!