The Bull And The Bear Market

The Bull And The Bear Market

Monetary decisions can be based on emotions most of the time. We are afraid to make investments, but as they progress we might feel greedy to make more profits. Emotions have a huge influence on the stock market too; Greed and Fear rule these markets and the trader’s minds. People often hear the words the Bull market and the Bear market, but what are these markets and how they are affected by the emotions of the traders.

The Bull Market: It is described as a time when the market is going up aggressively for a period of time. The traders are showing determination affecting the market to rise more and more. At times like this, the traders might trade under the effect of greed. The Bull markets usually show about a 20% rise in the stock prices.

The Bear Market: The bear market is the exact opposite of the bull market where the stock market keeps falling down over the period of time. It is said to have a bear market effect when prices fall down by 20%. The bear market tends to instill fear in stock traders making them pull out their investments.

Bull vs. Bear Markets: The Bull market is portrayed by trader’s enthusiasm and rational growth that can tend to encourage greed, whereas the bear market shows traders fear and lack of trust causing deterioration in the stock market. This happens when traders make decisions influenced by emotions when they are expected to make unbiased decisions. The number rule of the stock market suggests taking benefit of the emotions of other traders instead of taking emotional decisions. It implies buying quality stocks at lower prices in the bear market and selling stocks when the prices go higher in the bull market.

There can be various provocations in the bull market, alleging quick and very high profits but it can be just another scam waiting to happen. There are varied trading platforms available in the market, like the Olymp Trade, that claims to provide 80% returns. Investing in this type of platform can be risky as it does not provide any demo version where traders can learn the trading techniques before actually using.

Conclusion: Investors should not feel the need to change their investment planning based on sudden changes in the market. Rather they should focus on taking advantage of this situation by doing exactly the opposite of what the other traders are doing.

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