In trading, a “bull” or a “bullish trader” refers to an investor who believes that the price of a security, a sector, or the overall market will rise.
This belief can be based on technical analysis, fundamental analysis, or a general economic outlook.
Bullish traders aim to profit from this anticipated rise in price.
They may buy securities with the expectation that they can sell them later at a higher price, a strategy known as “going long.”
The term “bull” or “bullish” is derived from the behavior of a bull, which charges with its horns raised in the air, symbolizing upward movement in the market.
This is contrasted with a “bear” or “bearish trader” who believes that prices will decline.
The terms “bull market” and “bear market” are used to describe conditions in a financial market where prices are rising or falling, respectively.
Typically, a market is considered to be in a bull phase if prices rise by 20% after a decline of 20%, and in a bear phase if prices fall 20% from their recent peak.
It’s important to note that being “bullish” doesn’t guarantee profits, as predictions about future market conditions can be wrong.