Bearish Definition – What is Bearish? | CFI


Bearish 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 bearish bias towards a specific market or financial instrument, they believe that the future direction of the price will be moving downwards. A market can also be described as being bearish in that it is displaying characteristics that would imply that its future move is down or if already moving downwards that this trend is likely to continue for some time.


Being bearish or being in a bearish or bear market is the opposite to being bullish or in a bull market which is when a market is showing upward trend characteristics or a trader holds a bias that the future direction of the market is up.


Identifying bearish 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. Being able to identify when this is taking place or coming to an end is a key factor in maximizing trading profits or limiting losses.


Key takeaways:

  • A trader with a bearish bias believes that the future price of a market will be down.
  • Bearish is the opposite of bullish where the trader’s bias is that the market will be moving upwards.
  • Identifying bearish and bullish market trends is crucial to a trader’s success.

Important Disclaimer:

We would like to remind that while we endeavour to provide best possible services, CFI provides execution only services and any information, reports, opinions, commentary or other materials he receives from CFI directly or from its employees or through any analytical tools provided to him or third party research provided to him from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client accepts that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited.

Forex and CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. CFI International Ltd provides general information that does not take into account your objectives, financial situation or needs. The content of this website must not be interpreted as personal advice. Please ensure that you understand the risks involved and seek independent advice if necessary.

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