Bull vs Bear – A beginners guide for dummies

If you get a question what is the difference between Bull and Bear even being a trading dummy, however it already means you know we’re talking about financial markets, forex, stock markets or other once.

As you may already find, the financial world is deep and complex like an ocean, and it is necessary to understand its terms before you’re brave enough to ‘swim’ in that world. And of course, the very first thing to understand is to define what is Bull Market and what is Bear Market, as definitely we are not selling Bulls or Bears here.

What is Bull Market?

Above all, the term Bull or Bear describes market conditions, a scenario where the market takes or moves in the direction or another as a major force.

  • Bull Market is a rising market, or the uplifting pattern meaning the economy affecting asset, stock or index is growing and its value increasing.

So in simple terms Bull Market is a rising market where the price continues growing, also referring to the country or asset conditions as a strong one.

However, the Bear market considered more dangerous for trading, as losing value is much easier rather than increasing, which can affect a rise of volatility and rapid default or reverse of the market.

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What is Bear Market?

So as you may already understand, Bear Market is opposite to the Bull markets meaning a Market that declines, where Shares or Asset prices dropping and creating a downward trend.

  • Bear market means economy receding and stocks or its related instruments are declining in its price and value

It is obvious that during Bear trend economy slowing, also companies laying off some of its services, production and workers as well, all in all causing further drop in prices.

Bull vs Bear

Generally speaking, Bull vs Bear is a continuous game or a fight between two, while there are always counterparties that push the market towards its desired direction.

Also, representing a general situation Bull vs Bear shows a Supply and Demand conditions. In other words, meaning when Bulls are in control – there are many investors who demand to buy while supply is weak. So the security price is rising.

In reverse, the Bear market shows opposite affect where demand is much lower than the available proposal that results in price decreasing.

While looking closer, meanwhile or intraday trading definition shows a wider range of swings downward or upward, creating fluctuations or a “wave style” movements. It is always caused by the dynamic proposal, news and improvements or changes happening along with the market operation.

However, the Bull or Bear market definition is a characteristic of preliminary or stronger behaviors that is seen along certain timeframe, introducing a term – trend or a pattern. Essentially, each market conditions require a different approach and trading strategy, as markets behaviors impacts and determines the perception, market sentiment and performance as well.

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To mention few more words about Bear Market, it is a condition where optimism and a positive movement take over, causing investors or traders to invest more money and gain confidence. In sum, Bear Market appears when traders kept or withdraw money from the markets, as a pessimistic approach or instability mode takes over.

Trading under high volatility

Potential success always refers to recent and particular conditions Markets undergo, which should be carefully analyzed and followed. Despite a constant monitor of the situation and checking for signals showing us that market reverse.

Likewise, nowadays due to the Coronavirus pandemic that hit the world since the early March’20 caused a rapid drop in all prices affecting global markets in the highest volatility and rapid change to the opposite direction. Even though, the situation seems to be improving it is always good to keep a track and stay cautious as volatility and uncertainty remain the same, if not more in some industries.

The ongoing Crisis still walks its path, while no one knows what the lasting effect of the pandemic is, and when exactly a much awaited vaccine will be released or invented.  Ultimately, together with great trading possibilities recent volatility conditions making it harder to define which market bull or bear taking over now.

Certainly, to define whether Markets reverse and grow or falling is defined what companies survive post COVID-19 and how recovery goes on, which all in all forces as to stay extra alert.

Trading risks

Although trading activity because of its risky nature itself requires traders or investors to learn and understand risks as a priority. Also, high volatile Markets might not be the best option for very beginners, due to its sharp moves to the direction or another.

Nevertheless, potential success in trading requires good and detailed education, your self-discipline and adherence to the strategy, and of course go to the choice of a reliable broker with good trading conditions as first! Trading assets are complex instruments and it is necessary to place your strategy at test with Demo Trading, understanding deeply trading profile, also a bigger picture of the finance and economy itself.

Important to mention again, you should trust only well-regulated brokers, as scammers awaiting with ‘great opportunities’ at every corner, and nothing else matters if you fall into a trap. In trading safety of money always first, and it is a fact the only guarantees of its regulated and licensed nature you may get from sharply regulated brokers from the reputable jurisdictions.