Main Signs of a Bull Market: Everything You Need To Know

Bull Market

Riding a bull is considered a really difficult and life-threatening task to do, but ‘bulls’ are not always a threat… They could benefit daring people and award their risks with a lot of money. The ‘Bull Market’ is a term that is commonly used in financial markets. Stock prices are volatile. When the market is called ‘Bullish’ it means that the prices have been steadily increasing for a period of time. This term can be used, not only for the markets of stocks as a whole, but also for other types of markets like indices, cryptocurrencies, commodities, and indices where investors are searching for main signs and trends of long position opportunities.

Every time that a market tends to get ‘bullish’, investors use signs to identify bullish patterns.

First Sign 

One of the most general rules to follow is to be aware of the current economic health. A broad economic growth would be a good indicator of a potential ‘Bull market’. However, this is a really general guideline and is not essential for a ‘Bull market’ to be created. By increasing demand for stocks, the markets are getting less volatile which leads to a compounding effect of higher confidence among buyers who can promote a more intense potential for growth.

Second Sign 

Investors use a set of different indicators that can provide a very good estimation of the future of each market. Usually, a bull market marks a 20% rise in stock prices, which follows a previous 20% decline and is followed by another 20% decline. Technical analysis is a really good way to predict the trend. It is about analyzing a market’s price chart.

Charts are the visual representation of the price movement of a particular time frame. A chart can be analyzed through the candlesticks which represent the price movement within a time period. However, it is vital to understand the importance of “momentum” when using economic indicators. Experienced traders know that when it is time to use economic market indicators provided by intermediaries, such as blogs or online brokers, it is already too late. This is why successful investors build their own models which are adapted directly to the market and calculate their own indicators.

Third Sign 

In general, the prices of stocks indicate how investors forecast the future of each company. Investor perspectives on each market can be created by the company’s financial outlook, as well as results and news. For example, the creation of a new innovative product would positively impact the prospects of the company’s profitability and therefore the investing interest for the company. Buyers’ emotions play a key role in stock price movements. Unfortunately, speculators are getting advantage of emotional investing behaviors. In this way, markets are manipulated with social media fake news to play a protagonistic role in this notorious activity.

Stock Market Prices move higher

After getting to know what a bull market is, you can now understand why this is the period that most investors are seeking. A bull market gives you a really good opportunity to make money but you have to be careful, analyze and develop ways to be able to identify when the market is really bullish. Despite the growth of stock prices, the market is never too far from turning bearish. Investors should be very careful not to fall into the trap of the bear market.

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