Bull vs Bear Market
You might have heard people talking about “being in the longest bull market in history.”
And if you’re new to trading, all this lingo can be confusing.
Let me make this really easy for you.
In the next few minutes, you will learn what a Bull Market and what a Bear Market is. And I will show you a very easy way to remember this forever.
So What Does It Mean?
When people talk about bull or bear market, they talk about the direction of a market or of a stock.
- “Being bullish” means that people believe that a stock or the market is moving higher.
- And “being bearish” means that people believe that a stock is going lower.
In the beginning, I was really confused about this.
For me, it was important to find a way to make it easy for me to memorize.
Here’s An Easy Way To Use These Terms
Bull vs Bear Market
I used a very simple analogy to memorize when to use the word “bull” and when to talk about a “bear” market.
Think about it this way:
How does a bull attack?
A bull uses its horns, charges forward and when it’s ready to attack, the bull moves its horns UP. Think about how the bull attacks a matador in a Spanish Bullfight: The bull tries to pick up the matador and throws him through the air.
On the other hand, how does a bear attack?
When a bear attacks, it stands up tall on only two legs, and then the bear uses its claws and makes a move from the top down. A bear moves this claws DOWNWARDS when it attacks.
Easy enough, right?
Just remember how bulls and bear attack, and you know what term to use for what type of market:
- A Bull Market is a market that moves UP
- A Bear Market is a market that moves DOWN.
How Do You Determine a Bull vs Bear Market?
Everybody has a different way to determine the direction of the market.
I personally like to use technical indicators.
I’m using Relative Strength Index (RSI), Stochastics, and the Moving Average Convergence and Divergence (MACD) to determine whether a stock is more likely to go up, down, or sideways.
If you would like to see how exactly I do this, just go to www.mytradingroutine.com
That’s a website that I set up for you, and on this website, you will find a 35-minute video that shows you exactly how I use these indicators to find the best stocks to trade.
The Most Common Used Definition Of a Bull Market vs Bear Market
When you hear the “talking heads” on the news channels talk about a bulls market or a bear market, here’s how THEY define it:
Learn To Trade Stocks & Options In 15 Minutes A Day
They define a Bear Market if the market falls 20% from the most recent high.
On the other hand, here’s how a Bull Market is defined:
If prices are rising at least 20% from a most recent low, it means that we are now in a bull market again.
Short Summary
Now you know how a bull market vs bear market is defined:
- Bull Market means that the market is going up – like a bull attacking the matador.
- And Bear Market means that the market is going down – like a bear attack.
Now you know the lingo and know what a bull and bear market is.
Trading Futures, options on futures and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. The lower the day trade margin, the higher the leverage and riskier the trade. Leverage can work for you as well as against you; it magnifies gains as well as losses. Past performance is not necessarily indicative of future results.
Editors’ Picks
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price keeps its range around $2,330, awaits US PCE data
Gold price is consolidating Thursday's rebound early Friday. Gold price jumped after US GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the Fed could lower borrowing costs. Focus shifts to US PCE inflation on Friday.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
Discover how to make money in forex is easy if you know how the bankers trade!
5 Forex News Events You Need To Know
In the fast moving world of currency markets, it is extremely important for new traders to know the list of important forex news...
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and...
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.