What a paradox right? Who would want to run with bulls? Well, in Spain they do!
But in terms of financial markets and the context we are talking about here, you should absolutely run.
What is a Bull Market?
A bull market is the opposite of a bear market. It refers to a market that experiences economic growth, or rapidly increasing stock prices of 20% or more. However, in order to be classified as a bull market, the 20% must be after and before a 20% dip in stock prices. Unlike cyclical bear markets, bull markets can last for months or years and are associated with positive connotations.
Prior to COVID-19, the United States was experiencing one of it’s longest running bull markets. The boom started in March 2009 and ended in March 2020.
How to Make a Profit During a Bear Market?
There are several ways to make a profit during bull markets.
The most common is to buy a stock and hold it. The confidence in the economy due to the bull market encourages people to buy in hopes that their stocks will rise even further.
However, the most aggressive way of attempting to make a profit during a bull market is full swing trading. Like bear markets, it involves short-stocking and a great deal of risk. Since trades are made over a few days or at the longest, several weeks, investors run the risk of having a stock fall down overnight or over the weekend. As a result, investors can suffer massive losses if they make a miscalculation.
Investors who choose to utilize the full swing trading method evaluate their risks and rewards on a technical basis. This analysis simplifies the trading to some extent. Traders determine their trades based on the positions from the analysis and reflect their decisions soon after. For instance, an investor would be much more inclined to take a risk if a $1 share will possibly produce a $5 gain. In contrast, it will be less likely that they take a risk on the same share if it will most likely produce a $2 gain.
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