What is a Bull Market?

You might have often come across the terms "bear market" and "bull market" while reading about global markets. How do fauna relate to trading currencies, digital assets, goods, and raw materials? It all comes down to a kind of stock exchange slang, built on analogies of the behavior of wild animals and the actions of investors in global markets. Here, we delve deeper into bulls and the bull market.

Definition of a Bull Market

Returning to the fauna analogy, where bulls gore their opponents and then toss them up on their horns, investors known as "bulls" attack the market and drive the price upwards. Everything that happens on global exchanges during this time is called a bull market (trend).

If we move away from comparing with wildlife and return to the more familiar language for investors, then a bull market is a period of positivity on the exchanges, accompanied by rising prices, additional demand, absolute domination of buyers, and a noticeable decrease in the number of sellers.

In this case, traders who bet on rising prices are called bulls, and a market characterized by a permanent increase in rates is called a bull market. The duration of a bull market can last several months or even a couple of years. However, it is never possible to say for sure when the trend will change.

How to Earn in a Bull Market?

The main secret of traders making a profit in a bull market is selling assets at a higher price than they were bought. For maximum income during a bull market, it is important to adhere to three main rules:

• Take a long position at the very beginning of the trend.
• Analyze the market situation in real-time.
• Exit the position before the asset prices start to fall.

Features of a Bull Market

Bull markets often have characteristics that make them identifiable.

Here are some of them:

• The onset of a bull trend always indicates the optimistic mood of traders about the current situation in the global economy and expectations of a confident market growth in the future.
• The bloom of a bull trend is accompanied by low unemployment and a favorable period for companies. Enterprises invest in the future, expand and increase their product range, and also raise wages.
• During a bull trend, there is a noticeable increase in investor confidence, resulting in an increase in purchases.
• The market starts to be governed by the laws of supply and demand, which instantly pushes prices upwards.
• Most often, a bull trend is confirmed retrospectively, as it is quite difficult to determine its beginning until the asset prices collapse again.