Bulls and Bears – The Trends of the Forex Trading Market

The experts on the financial TV channels often use terms like “bulls” or “bears” which can be really confusing for those who are not familiar with trading forex or any other stock market for that matter. Such terms are very usual among forex brokers and traders when talking about a stock market. These words are here used as financial terms and they have nothing to do with any animals or sports teams.

When speaking of an upward trend of the market, the used term is “bull”. It means that the confidence of the investors in general is rising and that it could last for quite a long time. Every currency has a level of resistance. When this level is surpassed, the habitual expectation is for it to go on rising; hence, the comparison to a bull. In a nutshell, this term translates into a confident market triggered by the fact that this tendency calls for herd behavior, meaning that the number of investors who are willing to join and trade real money has an upward trend.

In order to express the contrary, forex brokers and traders use the term “bear”. It translates into a fall of all prices which could trigger a lack of investor confidence. When this occurs, the level of support in the forex market and not only, can be easily broken causing the prices to keep on falling. The comparison consists of the fact that a bear usually strikes downwards when attacking its victim. When it comes to the forex market or any other stock market, the “bear” term refers to a market that registers a fall of most currencies. Nevertheless, in such cases there may be certain currencies which could display a “bearish” behavior.

By Miracle