What are Bull Market and bear market in trading - BlockchainVsCrypto - Get Early Access for Success

Thursday, June 6, 2019

What are Bull Market and bear market in trading

What are Bull Market and a bear market in trading

Bull Markets

A bull market is a time or period of several days, months or years during which any stock, currency or cryptocurrency asset prices consistently rise or in an uptrend. 

Bear Market:

A bear market is a time or period of several days, months or years during which any stock, currency or cryptocurrency asset prices consistently fall or in a downtrend. 

Almost every day in the market world, you will hear the terms "bull" and "bear" terms to describe and identify market conditions. 

Every day you should know the direction and trend of the market.

Bull market = Market in an uptrend = rising market 

Bear market = Market in a downtrend = Falling market

In bull market prices of any stock share or cryptocurrency increases. Typically, in this scenario, the particular country's economy is becoming strong with an increase in employment levels.

In Bear market prices of any stock share or cryptocurrency decreases. Typically, in this scenario, the particular country's economy is becoming weak with a decrease in employment levels.

Factors affecting Bull and Bear Market:

Supply and Demand: 

In a bull market, we see strong demand and weak supply for any assets. 

In other words, a Large number of investors or trader in buying side and less amount of investor in selling side which results in demand is more than supply, ultimately share or asset price increases.

In a Bear market, we see week demand and strong supply for any assets.

In this case, a Large number of investors or trader in selling side and less amount of investor in buying side which results in demand is less than supply, ultimately share or asset price decreases.

Market conditions:

This is an important factor which decides the trend of the market. 

If the market is in a bad phase the market should be in a downtrend. 

If the market is in an Awesome phase the market should be in an uptrend. 

But remember this is not related to any single stock or currency.

This is an overall market portfolio.

Investor Psychology: 

I think this is one of the important factors which decide market condition towards bull or bear.

This is especially important in the stock market in day trading or in short term trading.

Most of the short term trading depends on news and especially in day training investor or trader psychology, sentiment or behavior is decided by the news.

If the market is rising but investor psychology towards particular stock, currency or crypto coin is negative then it affects the bull condition.

In a bull market, investors willingly take part in the market by hoping that they will earn some profit. 

What to Do in the Bull market and in the Bear market:

In a bull market, an investor should take part in the advantage of rising market conditions and prices by buying stocks early as a trend started, if possible and then selling them when they have reached their target points.

In a bear market, higher chances of losses if you an investor. In a simple word, if you identify that market in downtrend cutoff your losses and exit from the market.

If you trader you can place your order in shorts.

Conclusion:

Both bear and bull markets will have a large impact on your portfolio.

First, take your time to identify the market.

After that take your decision on building your portfolio with market investment.

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