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:
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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.
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.
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