Bullish vs Bearish: A Complete Overview
So you’re interested in investing, trading or just want to know more about finance. Then you might have heard of some terms that could be clearer and more understandable. One is bullish and bearish, often used to describe the market or an asset’s price. But what do they mean and how do they impact your decisions? In this article we’ll go through the basic concepts of bullish and bearish terms and some examples of how they might be used in different markets.
What are bullish and bearish terms?
Bullish and bearish terms come from the Latin words for “bull” and “bear”. They are both animals that symbolize strength, courage and aggression. A bull is a male cow that charges forward with its horns lowered, while a bear is a large black or brown animal that hibernates in winter.
Bullish terms describe a situation where something is expected to increase in value, price or popularity.
For example, if you see many people buying stocks or cryptocurrencies that have been going up in price recently. You can now say they are bullish on those assets. Similarly if you know a lot of good news or reports about a company or an industry that has been growing or innovating, you can say they are bullish on their prospects.
Bearish terms describe a situation where something is expected to decrease in value, price or popularity.
Another example, if you see many people selling stocks or cryptocurrencies that have been going down in price recently, you might say they are bearish on those assets. Similarly if you know a lot of bad news or reports about a company or an industry that is struggling or losing customers. You now say they are bearish on their prospects.
How do bullish vs bearish terms affect the market?
Bullish and bearish terms can affect the market differently depending on the context and time frame. Generally speaking, when there is more demand than supply for an asset, its price tends to go up (bull market). When there is more supply than demand for an asset, its price tends to go down (bear market).
But these trends can be influenced by many other factors such as interest rates, inflation, economic growth, political events, consumer confidence, etc.For example in 2020-2021 many investors were optimistic about the world economy recovering from the COVID-19 pandemic. They bought stocks and cryptocurrencies at all time highs. This created a strong bullish sentiment that pushed their prices even higher. While some investors were bearish on these assets due to rising inflation and interest rates and sold at all time lows. This created a very bearish sentiment in the market that pulled their prices down even lower.
How can you use bullish vs. bearish terms in your trading?
So you want to use bullish and bearish terms in your trading strategy or analysis? Here are some tips:
Keep track of the market trends using technicals like MA, TL, SL, RL, etc.
Look for signals from other traders like B, S, SL, TP, etc.
Use fundamentals like ER, AR, IN, etc.
Be aware of your own emotions like F, G, H, etc. and how they can affect your decisions.
Don’t let your emotions cloud your judgment or overtrade.
Don’t chase after unrealistic returns or get caught up in FOMO.
Never rely on one source of information or one indicator.
Take your own experience and intuition seriously.
Conclusion
Knowing these market terms and how they work can help you make better investment decisions and scale your profits.
But they are not foolproof or guarantees of success. Always do your research and analysis before trading.
Hope this article helped you learn about bullish and bearish terms. Comment below if you have any questions or feedback about this article! Thanks for reading!
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