Are you wondering what Bull & Bear are doing in the stock market? We have heard about this animal to attack others but how they can attack stock markets. If you’re new to the stock market, then it may confuse you. right? In fact, there are many other animals which are playing around in the stock market.
When I entered the jungle of stock market, I had the same feeling too. I dive into the share market in the year 2007-2008 stock market crash and learned my first lesson from it. Whenever market goes up, it is likely to come down and then may go up again. So, trade and invest cautiously and understand all the aspects of share markets before you hop into the trade.
You can make lots of money from day trading and investment but that doesn’t mean you just buy and sell shares here and there. So, before you invest, understand the key fundamentals and technicals of the stocks to avoid loss. Knowledge of trends & patterns also going to help you to make money from stock trading.
How Bull & Bear Attack Stock Market
Bull & Bear are animals but stock market actually adopted their attacking style. Whenever market falls, people tend to say that market is in bear mode or the trend is bearish. On the other hand, when the market rises, traders and investors say that the market trend is bullish or in bull mode.
Normally a bear attack with claws and in the downward direction so in a bearish trend stock price started to fall. On contrary to bear, a bull uses horns to attack from down to upward direction and so in a bullish trend stock price started to rise.
In fact, bullish and bearish are two types of traders or investors. One who is bullish is normally optimistic about the stock market and who is bearish normally a pessimistic about the stock market. Bullish traders are always in buy mode as they believe the stock or market price may rise. So, a bullish trader tends to attack market by buying stocks continuously. On the other hand, bearish traders are always in selling mode in anticipation that the price of stocks may fall further. Accordingly, a bearish trader attack market by selling stocks.
How To Know Bull & Bear Market Trends
As I told you in the beginning that if the market goes up, then you can expect it to come down. All you need is to wait for some time and it will surely start to fall at some point of time. Normally a bull & bear trend is determined by macro and a microeconomic factor which affect the stock price to move up or down. You need to react to the factors and take your position as bull or bear.
Macro factors like war declaration, inflation, employment, political transformation, international crises and many more. On the other hand, micro factors affect single stocks like result, management change, awesome product launch and others. So, all you need is to keep your eye and ear open while trading in stock market.
In addition, bullish investors see bearish market trends as an opportunity to buy good and fundamentally strong stocks and adopt buy on dips strategy. When the market is in bear mode, try to find good stocks and invest for a longer period and avoid small correction. At the end who remain in the share market for a longer period become a millionaire and not a trader. Traders always lose money in anticipation of quick gains. Big bulls of stock market like Warren Buffet, Rakesh Jhunjhunwala, and Radhakishan Damani become a billionaire by investing for long-term.
As a newbie, you need to invest when the price of any stock started to take off and sell whenever price started to fall. But the problem is nobody can’t predict the exact trend of the market. So, it is always to better exit from a stock whenever you’re in profit. It may happen that market breaks its peak and make new high and so your profit margin shrink as you have sold at lower price. But don’t be greedy at this point as at least you are sitting on profits. Have patience and stock market will provide you ample of opportunities.
I hope you’re now aware of bull & bear and how they attack stock market to make money. You don’t need to scare about these terms and keep in mind that market is cyclical in nature. However, there are other animals too in the stock market which I will cover in my next post.
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Last updated: Oct 24, 2017