The financial life of society is very diverse due to the presence of many investment opportunities. Forex, stock, commodity, futures, options and commodity exchanges, and today also cryptocurrencies - all this can increase the speculator’s capital. By uniting the common intentions of many market participants and creating around it their own subculture, specific slang also appeared. For example, bears and bulls on the exchange.
This is what bidders who conclude deals in different directions are called.
Slang characteristic
The history of the development of stock and commodity exchanges is remembered not only by a series of large landslides, but also by specific slang. For example, bulls were called traders whose goal was to increase the value of a trading instrument. They traditionally made deals to buy, expecting further growth. As a result, they complied with the main message of the classics of financial speculation, namely, buying cheaper and selling more expensive. On this difference, the bulls received their dividends.
In contrast, bears advocate the sale of financial instruments. Participating in tenders on the exchange, they sought to sell stocks, raw materials or goods more often. These are those traders who predict a price reduction, and therefore sell an expensive product (stock or raw materials), and after a decrease in value they buy it. As a result, they get the difference from the sale, participating in the regulation of the pricing process.
Any trading on the exchange is associated with the fact that technical and fundamental analysis can provide conflicting information about the direction of the upcoming transaction. Some bulls may receive signals for sale. By becoming bears, they sell. Therefore, almost all traders are both bulls and bears. At different times. More precisely, each of the bears sometimes held trades on the stock exchange with the aim of buying, and each bull sold at least occasionally. Therefore, such names are rather episodic and do not have any meaning under them. They simply complement the surroundings around trading with symbolism.
The origin of stock slang
Unfortunately, it is not possible to find out who came up with calling traders by such names. You can only find out why some were called bears, while others were called bulls. These symbols of exchange trading bear such names because of the manner of attack, which most accurately characterizes their trading, if we take the price of the instrument as a victim. For example, an animal bull attacks the target from below, throwing it with its horns up. The bear grabs the victim with its paws, rising to its full height, and presses it to the ground.
Now you should transfer this to the sphere of trading. Bears and bulls on the exchange act in the same way during trading. Sellers see that the price of the goods is very high, grab it with its paws and push it to the ground. Strictly speaking, they sell expensive goods, after which they buy it back in the lowlands of the market in order to return it to the broker, taking their profit from the transaction. Bulls act differently: they see a cheap product and buy it (toss up).As soon as the price reaches the predicted maximum, the transaction is closed, and profit is accrued to the trader.
Stock Trading Approaches
Symbols such as bears and bulls on the stock exchange are quite popular. And we are talking about stock, commodity, commodity and cryptocurrency trading. However, they are also characteristic of Forex, although it is a decentralized market. But the currency pair acts as trading instruments here. This means that buying GBPUSD is the same as selling USDGBP. In this case, the pound bulls are simultaneously dollar bears.
In US markets, where not a currency pair is traded, but a commodity or futures, the US dollar acts as a measure of value. On the exchanges of Europe - the euro, Russia - the ruble, England - the pound. Each regional exchange has its own quote currency. Therefore, bulls in the stock market raise its value, not being a bear in relation to the quoted currency. Bears and bulls on the exchange remain so until they close the deal.
Short and long positions
The concept of short and long positions also exists on the exchange. The former in the stock market or in CFD trading are made by bears, and the latter by bulls. A short position is an order to sell an instrument, and a long one is a buy order. A short trade (short) is called such only because the stocks used to fall quickly and strongly. Therefore, a deal lasting several days at the correct entry point brought a lot of money. A long position (long) is a deal to buy an instrument that could be on the market for a very long time while the price of the instrument is growing. On Forex, these concepts are used incorrectly, although in practice this is often found.
