Bull and Bear are the two mostly used words among the stock market trader or investor. These two words significantly impact the stock market traders .
If you follow the Business News Papers or Business News Channels in TV, you must be familiar with these two words Bull and Bear. The phrases like Bull Market, Bearish Market, Bullish Trends, Bearish Trends, Bullish Stock, Bearish Stock are the words listened in various TV channels or from the stock market traders or investors. Also you must have seen the Bull Statue in Bombay Stock Exchange (BSE). Let us discuss the significance of bull and bear in the stock market.
The beauty of the stock market is its volatility. The market goes up or down due to various reasons. To represent the sentiment of the market we use Bull or Bear to explain the true nature of Up or Down movement of the stock.
A bull rises its head above when it is in attack mode whereas a bear moves its head downwards while it attacks.
A bull market signifies economy is strong, market news is positive, traders and investors confidence is positive. When the market is in bull phase most of stock price will move up. Investors or Traders tend to buy more shares when they are positive about the stock market or they are bullish about the stock market.
Similarly a Bear market signifies when the economy is down, market news is negative, traders and investors confidence is negative. When the stock market is in Bear phase most of the stock price will move down.
At the beginning of the bear phase, traders use to book their profit and at the end of the bear phase traders use to buy maximum number of share at low price which will give good return in long term.
Similarly at the beginning of bull phase traders use to buy maximum number of share and they use to book profit when the share market are at top points of the bull phase.
The option traders use the bull spread and bear spread strategy. When the traders are bullish about a Stock they use Bull Spread and when they bearish about a stock they use Bear Spread. In Bull spread they get profit when the stock price rises and in bear spread they get profit when the stock prices fall.
Analyse the Stock Market properly before entering in to the market. Follow the Trends. You can earn money both in Bull market and Bear Market.
You need to follow suitable strategy to earn profit in market, whether it is a Bull Market or Bear Market.