Bullish is a term used to describe how a trader feels about the direction of a certain financial market or the actual direction a market may already be moving in.
If a trader has a bullish bias towards a specific market or financial instrument, they believe that the future direction of the price will be moving upwards. A market can also be described as being bullish in that it is displaying characteristics that would imply that its future move is up or if already moving upwards that this trend is likely to continue for some time.
Being bullish or being in a bullish or bull market is the opposite to being bearish or in a bear market which is when a market is showing downward trend characteristics or a trader holds a bias that the future direction of the market is down.
Identifying bullish market trends is crucial to the success of a trader because market sentiment is a leading factor in determining the direction in which a financial market will move.
Bullish traders believe that the future price of a market is up and try to profit from this by buying or going long in the market to sell this position back at a higher price when the market has risen as they were expecting.
Key takeaways:
- A trader with a bullish bias believes that the future price of a market will be up.
- Bullish is the opposite of bearish where the trader’s bias is that the market will be moving downwards.
- Identifying bullish and bearish market trends is crucial to a trader’s success.