Bull vs. Bear Market
Bull vs Bear Market: Let’s talk about bulls versus bears. What does this mean? What is a bull market and what is a bear market?
If you’re new to trading, all this lingo can be confusing and I want to make it really easy for you.
What does it mean?
When people talk about bull or bear market, it means the direction of a market or of a stock.
Bull means that people believe that a stock is going higher or that a stock has been higher.
And bear means that people believe that the 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.
When do we talk about a bull market? A bear market?
Here is how, for me, it was easy to memorize.
How does a bull attack? It uses its horns and it goes from down to up. It charges, right… And then it lifts up its horns. Bull market means going up.
On the other hand, how does a bear attack? A bear usually gets up on its two legs, right? And then it’s using its claw and its clawing down.
How do you determine a bull vs. bear market?
Everybody has a different way to do this and as you know, I personally like to use three indicators.
The RSI, Stochastics, and MACD to determine whether a stock is more likely to go up, down, or sideways.
This is how I determine whether I’m bullish, meaning that I believe that a stock is going up, or whether I’m bearish.
And if you would like to learn more about this, please, go to a website that I set up for you. It’s www.mytradingroutine.com
On this website, you will find a 35-minute video that shows you exactly how I do this.
In general, when you hear it in the news when somebody is talking about a bear market that, overall, we are in a bear market.
Here’s what this means.
It means that prices fall 20% from the most recent high. Meaning, the market made a high and then it was going down, down, down, down.
And when we are down at least 20% from the most recent highs, this is when you hear the media and analysts talking about officially being in a bear market.
On the other hand, this is exactly how a bull market is defined. After a drop, if now prices are rising 20% after the drop, this means that we are officially in a bull market again.
I know that for some, it might be confusing to hear about all of this bull market and bear market stuff, but now you know what it means.
means that people are expecting that the market will go down by at least 20%.
Bull market means it’s going up. A bull is attacking with its horn from down to up, right?
And a bear market means that the market is going down.
This was just a very brief explanation, but I think it’s important that you know the lingo and know what a bull and bear market is.
Now that you know you can impress your friends.
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