A bullish market is an optimistic market characterized by rising prices. In a bull market, there are more buyers than sellers. When a market, instrument, or sector is on an upward trend, it is generally referred to as a bull market.
Although the term bull market can be used loosely to refer to any strong market activity, it is often used in the financial markets when the price of an asset rises 20% or more from its previous low point.
Typically, a bull market arises when investors are optimistic about the future performance of an asset or the overall market indexes.
While a 20% increase in market prices is often regarded as the start of a bullish trend, most signs of an impending bull market are not that clear.
Traders use technical analysis to help them recognize bullish signals
The opposite of a bull market is a bear market, which takes place when investors are feeling pessimistic.
Falling prices (bearish trend) create a negative market sentiment and as traders feel less confident, they tend to sell more and more, causing a further decrease in prices and often what is known as capitulation.
Vincent Nyagaka is a Professional Trader, Analyst & Author. He has been actively engaged in market analysis for the past 7 years. He has a monthly readership of 100,000+ traders and has taught over 1,000 students since 2014. Vincent is also an experienced instructor and public speaker. Check out Vincent’s Professional Trading Course here.