What is the Bull Market
The bull market is the favorite trading environment for most financial traders. During this time, any tradeable assets or securities such as currencies, bonds, and shares surge upwards for an extended period of time, increasing their value and attractiveness. Because of this, both individuals and businesses start investing more money into the market, optimistic that they will achieve significant returns if they do. The origin of the name used to connote these conditions may be the way a bull lunges its horns upward when attacking.
Conditions that make up a bear market also drive securities to advance even further because of the mindset it builds among financial players. With an increased number of people entering the market to buy shares or currencies, demand increases, boosting their prices and making them even more valuable. At this point, risk taking becomes much more prevalent behind the emergence of positive sentiment and outlook that the greater economy is improving.
Bull markets may see their rally come to an end when something disrupts either its supply or demand, or when investors start taking in profits by selling all that they have held on to. Knowing when a bullish rally has reached its peak or is just temporarily taking a break, however, is difficult to determine consistently. Traders would still have to assess the conditions surrounding the market so that they do not end up exiting too early and limiting their profits or exit too late and lose profits.
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