Let’s Know the Bullish and Bearish Terms in the Forex Market
For those of you who are new to the forex market, you will often hear the terms bullish and bearish. Although you often hear the term, but you do not know what the two terms mean.
A beginner who has just started trading on the forex market should understand well the terms above. This is useful so that you can easily get a bigger profit later on.
This time we’ll cover the two terms mentioned above for you to understand them well.
The following is a further explanation.
History of the terms Bull and Bear
Bear is a word derived from English which means bear, while Bull is a term that refers to a bull in the English language. Both types of animals are associated with the pattern of price movements in the market and are closely related to the way the two animals attack their opponents. When a bear is attacking its opponent it will usually slam its opponent downward, while the bull will gore its opponent upwards.
Is that clear enough?
The attacks carried out by the two animals above are very similar to the market price movements in forex. Thus when market price movements are declining, then under these conditions are Bearish, because this condition is similar to the movement of a bear who is slamming its opponent. On the other hand, when market prices are soaring, the condition is called Bullish, because it is very similar to the way bulls gore their opponents.
Medium Bearish Market Conditions
When the market is in Bearish condition, it is an indicator that shows that market participants are very pessimistic. When Bearish occurs, then the initial symptoms that occur is the price continues to decline sharply. Even though in fact, these conditions will experience price correction and rise. The problem is that the main trend of price movements tends to fall more strongly than the strengthening of the price.
Bearish market conditions indicate that the economy is in a weak state. In addition, in these conditions the unemployment rate will increase and eventually consumer spending will decrease due to it. When this situation occurs, the investment flow will decrease and can even stop altogether.
Besides depicted based on the pattern of attacks carried out by a bear, it turns out there is another story why the conditions as above are said to be Bearish. This is because, bears are very identical to strong animals, but it takes time in the cold to do hibernation or long sleep. So the economy or stock that looks strong, still has a weakness in some particular time and this is very reasonable in the world of capital and financial markets.
Medium Bullish Market Conditions
This time we will enter into a discussion of the current Bullish market conditions.When this condition occurs, it is a sign that market participants are optimistic.The main characteristic of the Bullish market is that the sharp price increases are occurring. When this condition occurs, price movements tend to increase, even though there could be a price correction and a decline.
When the market conditions are experiencing Bullish, then the current state of a country’s economy is good. The unemployment rate is in a low condition and the level of consumer spending will increase. In addition, the flow of funds in the form of new investments will also increase and investors begin to dare to spend their capital.
Bearish and Bullish Limits You Need to Understand Well
In the forex market, there are boundaries between Bullish and Bearish conditions and this is usually seen from the Moving Average line curve for 200 days or often known as high-200 days. This indicator will show trends that occur in the long term and this is very important to be considered by investors.
When the price continues to experience movement below sma-200 day, it can be said that the condition is Bearish or in other words is experiencing sluggishness and decline. Likewise, on the contrary, when the price movement moves past the 200-line line and continues to rise upwards, then this condition can be said to be Bullish. This means that market conditions are optimistic and passionate.
With an understanding of basic terms related to Bullish and Bears, you already have basic knowledge related to the forex market. By knowing and memorizing Bullish and Bearish conditions, then you can be more unlucky to face any market movements that occur in forex. In addition to understanding the current market conditions, there are other supporting factors that you need to understand well in order to generate optimal profit.
Further Questions Regarding Bullish and Bearish Conditions
The thing you need to know is, although Bearish conditions reflect the decline in the stock market, but that does not mean you cannot benefit from these conditions. In some markets that do short selling , traders can benefit when conditions are down.
However, in Indonesia there are no companies that allow their customers to short sell from the above conditions. Even though there is no prohibition at all to do this.
Read Also : The Cup And Handle Pattern In The Forex Market
Bullish Conditions Are the Right Conditions to Buy Shares?
The next question is really the market conditions that are Bullish are the right moment to buy stocks or forex. When you want to do this, we strongly recommend that you record every movement in the market and understand trends well. You should study the current trends and make wise decisions by considering them. If possible, invite financial consultants to jointly make decisions.
In the case of many people, they buy when they go up and sell when the market conditions are bad and by chance they can benefit from the strategy. So they make a purchase at the time the market is bullish and sell it while Bearish.
Even though it shows good results, you still have to consider yourself based on various other factors to buy and sell shares or foreign exchange held. This is because the trends that occur may not necessarily bring you to make the optimal profit.
In addition to the above two terms, there are also Sideways in the forex market. Sideways condition is a flat market condition, because there are doubts about market players. In this case the condition of the buyer and seller is equally strong, thus making the market conditions flat and flat.
Hopefully the information above can increase your knowledge for the better.