What are Bull Markets?
They are any financial market, in which prices of a security or a group of securities keeps rising. There is a wave of euphoria. Traders are optimistic about the market. Every one is interested in buying stock. Every one seems to talk about that market.
It is probably so named, because the bull fights by thrusting its horns up.
In this market the charts clearly indicate the investor optimism and confidence, in the performance of the securities. The prices keep making higher highs and higher lows. Since the price keep moving up, It is also termed as an Up Trend.
Trend is your friend. Dance with the friend. Tune to the trend.
The hall mark of a bull market is higher high swing tops and higher high swing bottoms.
There is widespread optimism and euphoria in the market. This may be triggered by a news or an event. So traders keep buying as the price makes new highs. Once the price has reached a high, some traders wants to book some profit. So the price comes down with increased supply. This causes prices to swing down, which is seen on the stock charts as swing tops.
When the price comes down a little, because of the high positivity about the market, the price appears attractive to buy. The demand increases pushing the price high. This swing up of prices is seen on the stock charts as swing bottoms.
In an up trend, the price does not fall below the previous swing bottoms while they fall. When they climb up they go beyond the previous swing tops. So these swing tops are higher than the previous swing tops and the swing bottoms are also higher than the previous swing bottoms.
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In a market which is bullish the charts clearly indicate the investor optimism and confidence, in the performance of the securities. An up trend predominates in this market. The prices keep making higher highs and higher lows.
This market is very ideal for trend trading investors. Never short sell in a bullish market. Even if your time of entry is wrong, a long trade is always profitable.
An up trend is more healthier if the up days (days where close price is higher than open price) are accompanied by increased volume and down days (days where close price is lower than open price) are accompanied by decreased or normal volume.
The onset of a bullish market, as determined by the stock charts, is a good early signal of the recovery of the general economy, because the bullish trend always precedes the general recovery.
The momentum of rise is slower than the momentum of fall of a bear market. The more it rises, higher is the risk of falling.
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