What is a Bull Market?

It’s one of the most fundamental questions a beginning Forex Trader will ask: “What is a bull market?”

Think of it this way: A bull charges and bucks his horns UPWARD. We call this ‘behaving bullishly’.

So if a Forex market is trending upwards, we will say the market is behaving bullishly. We will therefore adopt a bullish trading strategy.

A bullish trading strategy does not mean that we rush into the market and behave “like a bull in a China shop”! It simply means when a currency is trending upward, you enter the market by buying.

Forex is different to the stock market in that you can trade with any trend. In a bull market, you enter as the trend is about to go upward by buying. In a bear market, you enter the market by selling.

The trend is the most important factor to consider when analyzing a market and deciding whether to enter a trade. You can do all the analysis in the world, but at the end of the day, always trade with the trend.

As Edwin LeFevre says in his book, Reminiscences of a Stock Operator,

“It takes a man a long time to learn all the lessons of all his mistakes. They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side.”

…and…

“In big bull markets the plain unadulterated sucker, utterly ignorant of rules and precedents, buys blindly because he hopes blindly. He makes most of the money until one of the healthy reactions takes it away from him at one fell swoop.”

…AND LAST, BUT NOT LEAST….

“In a bull market your game is to buy and hold until you believe that the bull market is near its end. To do this you must study general conditions and not tips or special factors affecting individual stocks. Then get out of all your stocks; get out for keeps!”

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