What are Bullish and Bearish Markets? You must have frequently heard the words bullish and bearish from many traders. These words may sound foreign to you now, but by the end of this article, they won’t be anymore because we will explain these terms to make them sound as simple as possible. Basically, the terms “Bull” (bullish) and “Bear” (Bearish) are used to define the overall financial market performance in general. A bull market means that the trend is going up meanwhile a bear market means that the market is going down. Bear in mind that a single day cannot determine whether the market is in bullish or bearish form. It can take several weeks or months to tell which direction the market is heading towards.
Bull Market History It is assumed by some traders that bulls first became synonymous with rising and falling prices when individuals would place bets on whether dogs are able to kill a bull chained to a post which is called bullbaiting. The enchained bulls will then use their horns to defend themselves from the dogs. Others believe that bearskins were used to describe the market behavior in the 18th century when dealers in bearskins were reported to have traded bearskins before they were brought in. The term bear reportedly became very popular in the early 18th century when referring to stocks after a trade company's stocks collapsed after being sold by investors.
What happens in a Bull Market? In a bull market, there is confidence and positive expectations that good results will happen soon. The bull market occurs when the financial economy is doing well. This is usually related to the equity market. Despite being related to the equity market it applies to all financial markets like currencies, bonds, and commodities.