Bullish and bearish are two popular terms that are often used in the financial market to describe the general condition of it. To indicate depreciation, the term bear or bearish market is used, and to show appreciation, the word bull or bullish trend is used metaphorically.
In a single day, a market can be bearish or bullish, and a couple of months and weeks indicates if the market is taking the bear or bull position.
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Bullish
The confidence of investors is high in a bull market. We find positive expectations and optimism here that a good result will be obtained. When the economy performs well, then this type of market occurs. Because of low unemployment, market shares and GDP rise to a great extent.
It generally deals with equity but applicable for all the markets such as bonds, commodities, currencies, etc. The economy of a country looks very well in a bull market. For this reason, in this type of change, we see the GDP is moving upward. The prices of equity take the rise when the rate of unemployment is less. This type of situation is prevalent not only in the stock but also in the Forex platform with its currencies like the New Zealand Dollar (NZD), the Australian Dollar (AUD), andthe Canadian Dollar (CAD) and in the other emerging markets.
Importance of the Market Trends
FX trading is executed with the currency pairs where one currency becomes strong against another currency. One can trade using both ways that means buy financial instruments and sell those later based on market conditions. We can buy at the support level and sell in the resistance by taking advantage of the bullish trend. Beginners must be careful of the falling markets and should execute their trades mostly based on the bearish trend. In FX, bear, and bull determine the strength of the currencies.
If you understand the market trends, making proper decisions will be a lot easier. The management of the risk will be stress-free, and you can get a better understanding of the exit and the entrance of the trades. Professional CFD traders always encourage rookies in the Mena region to learn about the cycles of the market. Once you start to understand the different phases of the trend, you will able to understand the bullish and bearish concept very precisely.
Bearish
The bear market indicates the trends in the negative flow where investors feel riskier to sell their financial assets. The possibility of loss is much here as prices continuously lose their values here.
Investors tend to short sell in the shortest period or try to move on the safer investment such as gold or securities with fixed income. Experts take their move to haven currencies like the US Dollar and Japanese Yen (JPY) after selling the riskier financial instruments.
Does the Trend Really Matter?
This really matters as it can help you to make a great profit considering the bearish or bullish trend. Traders should buy in strong currency and sell the weaker currency in the pair.
Relation of the lot Size with the Trends
A lot is considered as the smallest unit to measure the amount of the deal. The value of trades often deals with the integer of the lot size and the number of lots. This is considered a key to successful trading. The position size denotes how many lots we can attain in a specific trade.
100,000 units can be the standard size of a lot, and there are also nano, micro, and mini lot-sized, which can be 100, 1000, and 10000 in size. Newbies should take on a smaller lot in the beginning so that they can face the upcoming trends strategically.
To get the best out of the FX, a study on the lot size and trend is a must. Professionals research these issues in depth to stay up-to-date with the latest changes.