What is bullish trading market?
Bullish definition:
A bull market is the condition of a financial market in which prices are rising or are expected to rise.
Bull in forex
The trader is considered to be a bull or his projection is bullish if he believes that the value of the asset will increase.
Usually only if a trader is bullish, he/she will purchase a particular asset. A person who is a bull on any asset may just have an opinion about the asset, and not take any action on it since it is risky. The bullish stance may be extremely specific to a specific asset or stock, or it can be a general opinion on the market for the asset.
What do bullish mean in trading? (see image below)
Very often we will read on the internet “bull in forex” “bullish stock” or “bullish bearish market” etc. So, the term bull, bullish is derived from the action of a bully who strikes his horns upwards, making the prices increase.
When the price of an asset is rising or there is an uptrend it is called a bull market. This usually continues for a sustained period, typically some months or years. It should be noted that the terms long, bull or bullish may be used interchangeably and indicate that the prices of the asset will increase.
Like all other fields, there are many terms that are unique to trading. A new trader is likely to hear the terms Bullish, bearish, long and short often and will have to understand their meaning to gauge the market and expert opinions. He will also have to understand these terms to communicate effectively with other traders. Understanding the term will also make it is easier to determine a trader’s strategy and forecast for the market.
In trading, the term LONG is as same as BUY. If a person is going long on a stock, he is planning to buy it. If a trader is long on a stock, he has purchased the stock and owns it. In trading, a trader will go long on or buy, something, whose value he believes is likely to increase in the future. The trader will plan to sell the asset at a higher price and make a profit. However, the value of the asset can also decrease.
Bearish and bullish definition
Bearish definition:
A bear market is the condition of a financial market in which prices are falling or are expected to fall.
For traders, being bearish is the belief that the asset value will decrease and is the opposite of bullish. A trade may be bearish about a particular category of assets or a specific company, currency. The trader may only have a bearish opinion and not act on it. Alternately he may sell his assets, going short on the asset. The term bear or bearish is derived from the behavior of the bear, which strikes downwards using its paws, and pushes the prices downwards. A bear market, which is also called a downtrend is noticed when the prices of an asset are falling over a period of time, typically over the years or months.
Why called bear market? It is because the way in which a bear attacks its prey—swiping its paws downward.
Though trading is usually associated with purchasing at a low price and selling when the price increases, traders can also make a profit by selling when prices are high, and purchasing the same asset when prices reduce. A trader who is shorting or being short will sell at a high price hoping to buy the same asset later at a low price. The term short selling is also used for short. In the forex, and futures market, traders can short anytime they wish. However, in the stock market, there are restrictions on the stocks which may be shorted, and when they can be shorted. If any trader claims that he is shorting any asset, he believes that prices will reduce.
Conclusion
A trader should act on his bullish or bearish opinion only if he has a clear trading strategy that is well tested. It is important that a trader understands these terms since they are used extensively in financial news, market analysis and other articles on the trading of all kinds of assets.
