Where Did ‘Bull’ And ‘Bear’ Come From

How did the two terms come is something that is still not very clear but still there is some information on how the terms bull and bear came.

The bull and the bear market get its name from the way animals react to its victims. The bull will drive its horns, with its horns facing the air. The bear will swipe downwards on its prey. Bulls and bears are also popular contenders and most often they were put in the arena to fight with each other. The match between bulls and bears were a popular sport in the ancient times in Rome.

Another theory that goes behind these names is when the middlemen who used to be involved in the bearskins used to sell the skins that they were still to receive. These were the short sellers. After the middlemen used to short sell the bear skins, they used to wait and hope that the purchase price of the skin would be less than the market price that it was traded in currently. In case of a decrease, the middleman made a profit from it from the spread in the price. This is the price at which they sold the skin and the price at which they later brought the skin. These were known as the bears and the term got thus associated with those who expected a decrease or a fall in the market.

The bearish move

The chances of losses are very high in a bear market because the price is losing its value continuously. Where will the price stop losing its value is something that cannot be predicted? If you invest in a bear market thinking that the market will move to an uptrend then you may end up with a huge loss before the market turns around. Thus you will not be making a lot by buying in a bearish market.

However, if you short in a bearish market then you would be making huge amounts of profit. Take care that you short the market near the high of the market and not close to demand level. This is because the chances of the price reversing from the demand level are high and thus you may end up in a loss-making a trade.

Conclusion

There is no way in which you can predict what the trend of the market will be. So you need to make sure that you invest wisely. Catching the exact up or down of the market is impossible, so all that you need to do is to let the market make a lower high and lower low for a downtrend and higher highs and higher lows for an uptrend. Check the trading app.

 

 

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