Thursday, May 5, 2016

What is a Bear and Bull Market

In the financial market, we always hear the terms “bear market” and “bull market”, as it is commonly used to describe the market’s condition. Despite the popularity of these terms, not everyone fully understands the definition of these terms. 

Bull and bear markets are used to tell the condition of the market in general, whether the market is in an upward or downward trend.

Bull market refers to a market that is appreciating in value. An appreciating market, also referred to as a bull market, happens when the market is showing a high level of confidence and the prices are going up. Usually, during a bull market, the investors are confident that the uptrend will continue. 

Bear market, on the other hand, refers to a market that is depreciating in value. During a bear market, the economic performance is bad, and the prices are falling in value. 

These two terms are commonly used in the stock market, but it can also be used in other forms of trading such as bonds, forex, and commodities. 

Where Did These Terms Come From?

There is no clear explanation as to how the traders end up using these terms, but the most common explanation is that the bull and bear markets are named after the way in which each animal attacks its prey. A bull thrusts its horns up into the air when attacking its victim, while a bear swipes its claw downwards to attack its prey. 

Learn more about the forex market and further understand what is forex by reading our educational forex articles. Find out who the best forex brokers are, visit our official website --!

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