Home Finance Bull and Bear Markets – How They Are Identified

Bull and Bear Markets – How They Are Identified

by wrich gbaf

A bear market is a trend of free markets to move either up or down over time. Traders use charts to identify whether the market is going to go up or down. These trends can be classified as primary for short-term periods, secondary for medium-term periods, and tertiary for long-term periods. Usually the market will trend up before it comes back down, but this is not always the case. If you are invested in a bearish position on a currency pair and it should move up for a period of time before it reverses out, then you have likely been exposed to a bear market.

A bull market is when the stock prices increase for an extended period of time, sometimes for several months. Investors who are invested in a bull market will see their portfolio earnings increase because the value of the asset increases for an extended period of time, sometimes even tripling. The increased by interest created by a bull market creates a demand for the security in the market. When this happens, the supply is reduced and the investor can sell their shares for a profit.

There is no set rule for identifying a bull market or bear market. Markets tend to either swing up or down with the economy and consumer spending growth. With so many variables affecting the economy, stock markets react in different ways. Some investors like to wait for the economy to improve before they make a move. Others enjoy being in a bull market so they can make profits even if the economy takes a turn for the worst.

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