Forex Trading for Beginners > Analysis > Bullish vs Bearish
Bullish vs Bearish
What it means
The terms bullish and bearish are commonly used in world of finance, trading and investment.
They refer to two opposing outlooks on the financial markets - either positive or negative.
Bullish vs Bearish
Sections
Bullish definition
When someone is bullish, he/she is optimistic about the economy and in the financial markets.
Typically, such a person would expect the price of a financial security (such a stock) to go up, and expect it to be on an uptrend.
A common strategy of a bullish trader is to buy on pullbacks, which means to buy when prices move down in the short term, as he/she expects the price to start moving up again shortly.
Put simply, being bullish means to expect things to go well and improve.
If you are bullish on the market, you expect prices to keep moving up, up, up!
A little history about the word: Bullish
The term 'bullish' originates from the stock market, where prices historically move up slowly, like a bull going up the stairs.
Bearish definition
When someone is bearish, he/she is pessimistic about the economy and in the financial markets.
Typically, such a person would expect the price of a financial security to go down, and expect it to be on a downtrend.
A common strategy of a bearish trader is to sell on pullbacks, which means to sell when prices move up in the short term, as he/she expects the price to start moving down again shortly.
Put simply, being bearish means to expect things to deteriorate and get worse.
If you are bearish on the market, you expect prices to keep moving down in the foreseeable future.
A little history about the word: Bearish
The term 'bearish' originates from the stock market, where prices historically move down quickly, like a bear jumping out the window.
Bull vs Bear market
A bull market refers to a financial market (stocks, currencies, commodities, etc) with prices that are moving up persistently.
People tend to love bull markets because everyone who has invested in that market is benefitting from it.
On the other hand, a bear market refers to a financial market with prices that are, on the whole, moving down.
People tend to hate bear markets because everyone who is invested is losing money, with the exception of those who have short the market.
Bull vs Bear traders
If you're a bull trader (or bullish trader), you are generally looking to buy in expectation of the price of a financial security to go up.
Conversely, if you're a bear trader (or bearish trader), you are generally looking to sell in expectation of the price of a financial security to go down.
Whether you are bullish or bearish depends on your analysis and view of the market!