Connect with us

Uncategorized

About Bullish: Definition, Characteristics, and Causes

The term bullish has been widely heard by investors in the stock trading world. However, for beginners, it’s a different story. Bullish is one of the terms that all investors need to know, both those who are just starting to invest and those who are already good at investing. By knowing this term, you will understand financial market conditions.

If you hear the term bullish , you will probably hear it at the same time as bearish . These two terms broadly describe financial market conditions. In order to understand both, it is necessary to first understand the terms of each. Therefore, let’s take a look at the following explanation of bullishness in stocks. 

Definition of Bullish

Bullish is a term that indicates financial market performance that is consistently increasing. This term is taken from the word ” Bull ” in English which means bull. 

Why is the bull the analogy? If you look at the way the bull attacks, the direction of the bull’s attack is carried out from the bottom up using its horns. Associated with the money market, at first glance it can be seen that this way of attacking shows a graph of the projection of increasing market conditions. 

Bullish is generally used in financial markets, such as stocks and forex trading. In several stock exchange offices in the world, this condition becomes a reference that shows the stock index in that country is increasing or strengthening continuously. For the world of forex trading, bulls show prices that consistently strengthen over a certain period of time. 

In addition to the stock market, bulls can also be used for other assets. In this case, the asset in question is an asset that is traded, such as bonds, property, currency, or other financial commodities. 

Bullish Market Characteristics

To be able to understand the bull market in stocks further, it is necessary to know its characteristics. In general, bullishness is indicated by investors’ optimism and expectations on investment returns over a certain period of time. Not only that, this market will also be affected by increasing supply and demand for stocks. 

When the demand for stocks is increasing, the supply for securities will weaken. In other words, investors will tend not to sell the securities they own. As a result, prices go up .

Although the market trend is unpredictable and the time period is unpredictable, the enthusiasm and optimism of investors will greatly affect the rising of this market chart. 

An increase in the projection graph can be said to be a Bullish market if there is a 20% increase in stock prices. Generally, this increase occurs after the stock price weakens by 20% or is experiencing bearishness . This increase can also occur before the price is indicated to be weakening again.

Of course, the increase and decrease in stock prices greatly affects the economic condition of a country. If the economy of a country is good, the potential for stock prices to rise will be even greater. If stock prices generally rise, the financial market is experiencing a bullish condition . 

Factors Causing a Bullish Market

Of course, the occurrence of a bull market does not appear immediately, there must be a factor causing it.

  1. Economic conditions that have been or are being strong in a certain period.
  2. The country’s Gross Domestic Product (GDP) has strengthened over a period of time.
  3. The decline in unemployment in the country.
  4. The development of business and business sector conditions.
  5. Investor confidence and enthusiasm can affect the stock market.
  6. The company’s first increased share listing.
  7. Good industrial profit growth.

Bullish Occurrence Indicator

In addition to the causal factors, you also need to know the indicators for the occurrence of bullishness . This indicator shows signs of what might happen. Here are the indicators.

  1. Pay attention to moving averages

    The easiest and most popular way to find out the trend of a bull market is to look at the moving average . At a glance, the moving average is the average market movement that is determined over a certain period. The average price seen in this moving average is the closing price for the period chosen by the investor. 

    For example, an investor wants to know the movement of stock prices in the last 30 days. The known moving average can be calculated based on the following formula.

Click to comment

Leave a Reply

Your email address will not be published.