If current recession fears are limiting your trading and financial goals, you're not alone. Given the history of recessions, it is only natural to consider the concerns and concerns associated with them. But if you have liquidity now, consider taking advantage of a rare trading opportunity on the horizon. If you have an Exness trading account at the same time, and make sure that the account is fully active and has sufficient funds, this is probably the smartest move you can make this year.Recessions come and go, and while many people and families suffer, a lucky few have taken advantage of previous economic resets. Let us take a deep dive into recession trading, explore the telltale signs, and create a financial plan for 2023.What effect is the next recession likely to have on stocks?Every recession has a temporary negative effect on the stock market. The 2008/2009 recession had a huge impact on share prices and the stock market as a whole. The housing collapse triggered the recession, which in turn led to a decline in economic activity.Stock prices plunged, with the S&P 500 falling more than 50% from its 2007 high to its bottom in March 2009. During the same period, the Dow Jones Industrial Average also plummeted, falling more than 50%.Stocks stayed low for several years, and the S&P 500 returned to its pre-recession high in 2013. The Dow Jones Industrial Average took even longer to recover, not reaching its pre-recession high again until 2015.But in any case, the index eventually recovered and resumed its rapid upward trajectory. In fact, if you had the misfortune to buy the S&P before the 2008/2009 crash, but held on, your investment would have grown by 158% at today's prices.The above example shows that when economic uncertainty is high, it is clear that trading indices and certain stocks can generate profits even when placing orders at the worst possible time. But let's explore how to optimize your entrance.Signals the beginning of a recessionRecessions occur with regularity, especially in recent decades. If timed well, it is possible to hedge against inflation and interest rate losses, and since prices are discounted during downturns, it may even allow people to profit by trading bear markets.But the first question is, how do we know when a recession has begun? There is no gun to signal the start of the game, and the media dare not make such statements, because such statements could trigger a sell-off across the entire asset class and even trigger public panic."Bad news is an investor's best friend."Warren BuffettFor most people, news of the stock market crash represents the beginning of an economic slowdown. It hasn't happened yet, but there are several precursors to a stock market crash, and we're already seeing them.Big investors are waiting for those known warning signs and are ready to cash out or move into gold and other safe-haven assets. So what are the signs before a stock market crash?In the past, recessions have been preceded by a sharp rise in unemployment, a fall in wages, a fall in consumer confidence and a fall in the value of currencies tied to consumption of everything from energy to food.In addition, corporate revenues would fall. Quarterly earnings show a downward trend or a strong signal that the current stage of the economy has come to an end and is entering a reset state.We've seen massive layoffs at Google, Meta, Microsoft, and many other high-profile companies. Four banks have failed, and companies such as Disney, Netflix and Meta have posted losses in the last six months. The dominoes have begun to fall. What happens next?Layoffs represent a reduction in public spending. Companies will face lower overall demand, leading to a second round of layoffs, more loss-making reports, and more cutbacks in public spending.Bank of America now forecasts that the economy is shedding about 175,000 jobs a month on average, with job losses peaking at 500,000 in the coming months.The economy is thus locked into a downward spiral that will eventually correct the perpetual growth that every company insists on. The outlook is grim, but don't lose hope. Like the mythical animal phoenix, the global economy needs to rise from the ashes before it can be reborn, and buying shares after a stock market crash is one way to gain access to cheap stocks before they do.Time to short?Exness traders can short (sell) stocks and other varieties. Shorting stocks before a market crash can be lucrative, but timing it can be as difficult as winning a local jackpot. The chance of profit is small, the risk is high, and it is more like gambling than trading.So far, the three major indexes are down 20% to 30%, so to short now is to enter an already formed short market.Since 1946, the average bear market has fallen about 30%, with the worst being the 2009 financial crisis, when the S&P 500 plunged 57%. At the time of writing, the downside volatility is about negative 25%, but many analysts and prominent investors warn that the severity of this recession will be the worst in history. The magnitude of the fall in the stock market alone is impossible to predict.If Wall Street analysts' doomsday predictions about the economic outlook come true, yesterday's short traders could indeed make a lot of money. But this lying train has left the war, we do not recommend chasing on board. Many traders who try to short in the coming weeks will find themselves with slim margins on their short orders, just above the bottom.What should traders do now?First, you need to focus your efforts on where you are making money right now. Whether it's a job or a business, that's your number one concern. If you open an attractive market order at a low price now, but have to sell before the market picks up due to cash liquidity problems, this is the last thing you want. So take stock of yourself and your income situation and make sure you're well prepared to navigate the coming storm.Next comes your spending. It is also important to reduce unnecessary expenses. Although following this advice means fanning the flames of inflation/interest rates, your liquidity needs to be in a strong position when the market picks up and you need to trade.By and large, your money should be safe in a bank in cash, but in a fact sheet on tight monetary policy, the authors bluntly state that if only 50 per cent of uninsured depositors decided to withdraw their money, 186 mid-sized banks around the world could follow in the footsteps of Silicon Valley and Silvergate. To be on the safe side, consider spreading your wealth among different trusted institutions.Exness is a large company that trades more than $3 trillion a month. In order to comply with regulatory requirements such as the EU Cyprus Securities and Exchange Commission and the UK's more stringent Financial Conduct Authority, the company's client funds are kept separately from company funds in Tier 1 banks, giving Exness traders peace of mind to trade. In addition, Exness has strong cash reserves in excess of customer funds to ensure continuous operations no matter what economic conditions.Keeping cash in a broker's account or under a bed was once considered pointless, but if all other assets are falling in price, cash can sometimes be the safest option. And if even billionaire Rey Dalio admits that cash is no longer scrap paper, it's worth considering saving.Cash is now an important part of hedge fund managers' portfolios, and their holdings are at their highest level since 2001. Even Citibank says cash is the only asset lifeline available to investors in a recession.Protecting your wealth while preparing for opportunities is the rule of the day.Trading after the stock market avalancheStocks and indices suddenly look less expensive. When the market and the media are wailing every day, statistically it's time to buy. Warren Buffett has a good analogy for this."When the price of burgers goes down, we sing; We cry when the price of hamburgers goes up."Warren BuffettBut when it comes to the stock market, many traders think it's too risky to buy in a bear market. It's a bit like refusing to buy something when you're offered a 50% discount on Black Friday, thinking that the price could go even lower after the sale ends. This idea is simply irrational. "Buy low, sell high" is the motto of every trader, and stock prices are no lower than they were during the recession. Wall Street is on sale, and all you need to do is be prepared.Which assets will bounce back the most strongly after a recession?So how can we tell which assets will rebound the fastest and strongest? No one can answer that question with confidence. But there's an analogy that might help you lock in some assets.Markets are like a global forest. The largest trees have deeper roots and wider rhizosphere coverage, providing better access to available resources such as light and water. The most mature companies have a similar advantage when the environment is bad, and they are the ones that bounce back every time.For example, the S&P 500 fell about 29 percent on average during a recession, but rebounded 40 percent the following year and rose 58 percent over two years. This means that buying ultra-low is statistically more profitable than getting out of the market before it hits bottom and waiting for the market to recover. This may seem obvious, but we humans are emotional creatures, and we have an inherent behavioral tendency that tells us to keep possessions close to us and guard them carefully when winter is coming.Earlier, we mentioned that for most people, the stock market crash symbolizes the beginning of an economic slowdown. But big investors are different from most people. Big invest