What is Meant by Bull and Bear Markets?
No one really knows the exact origin of the terms “bull” and “bear” to describe the stock market, but their meaning is clear. The most important thing to know about these terms is that they describe long-term trends, not short-term changes. Bull and bear markets are usually measured in years. In stock trading and investing there are bulls and bears. It sounds dangerous but it isn’t.
A Bull Market
A bull market is a rising market. In a bull market, investors are positive. The economy tends to be strong. This is when the market is showing confidence. Indicators of confidence are prices going up, market indices like the S&P/TSX, or NASDAQ go up too. These are bullish characteristics. If there is a run of bullish days then you may hear the market is a bull market. Technically though a bull market is a rise in value of the market of at least 20%.
A Bear Market
A bear market is the opposite to a bull. If the markets fall by more than 20% then we have entered the bear. It is considered a declining market with a lack of confidence. Prices hover at the same price then go down, indices fall too and volumes are stagnant. In a bear market people are waiting for the bulls to start driving the prices up again.
What is the main take away from this and also a key to your success?
We take advantage of the bulls and bears.
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