In any
securities market, traders make their money by watching and analyzing market
trends and patterns, analyzing the effect of fiscal policies, among other
strategies. These markets could be those of stocks, commodities, currencies,
bonds, futures and many more. There are three different patterns that a market
can portray. These are; an upward pattern, creating what is known as a bull market, a downward pattern,
creating what is known as a bear
market and a sideways zigzag pattern
creating what is known as a sideways
market.
Bull Market
History has
it that these different patterns were named after particular ways in which
animals perform an attack on their enemies. As such Bulls when charging to
attack an enemy, they do so by lowering their heads and with their horns
lifted, they aim at lifting the enemy. A bullish market is therefore one that
portrays characteristics of an upsurge in prices. Such a market would suit both
sellers and buyers.
Bear Market
A bear
market on the other hand is derived from how a bear attacks its enemy. A bear
using its paws, lifts them up and swipes them downwards upon the given prey. A
bear market is therefore one where prices are plummeting akin to the famous
stock market crash of 1929. Such a market would be primarily a sellers’ market
but professional investors have mastered the art of buying and selling at any
pattern by shorting.
Sideways Market
A sideways
market is not aligned to any animal but it is one that portrays a zigzag
pattern. It takes the middle ground between the bear and the bull market.
It is my
hope that you found this helpful.
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