Characteristic Of  The Market

The market moves in two phases. It could be in a bullish phase or bearish phase. The bull or the bearish phase of the market is because of some characteristics of the stock prices but there are many other factors that one should know of.

Supply and demand

Supply and demand are important characteristics for the stock prices to go up or down. In a bull market, the demand is higher than the supply. This means that more people want to buy the security and very few are willing to sell the security. As a result of this, the prices rise and this keeps the market bullish. When the market is in a bear phase the opposite is true. Here the investors are more ready to sell the stock and very few are willing to buy the security. This pushes the price of the security down on the trading app.

Psychology of the investor

The market movement is because of the way the investors perceive what will happen in the market. The sentiments of the investors will make the price to either rise or fall. This is the reason why the sentiments of the investor and the psychology of the market are dependent. The bull phase is when the investors are bullish on the market and they want to participate in the market. This purses the price up higher. In a bear market, the sentiments of the investors are negative and the investors are moving their money out from the equities to other secured assets. This causes a decline in the stock market prices. The traders lose confidence in the market and thus the market turns to bearish.

 

Economic activity

The economy and the stock market are highly linked. The stock market is composed of stocks of companies and these companies are totally dependent on the economy for their performance. This is why the movement in the economy impacts the stock prices as well. When the economy is weak then the sales are lower and this leads to bad numbers for the company, this, in turn, pushes their prices down. This impacts the market and makes it bearish. When the market is bullish then the economy is going better and more and more investors are ready to spend. This leads to the market turning bullish.

You need to see the performance of the market in along term to understand whether the market is bullish or bearish. The small movements that happen in the market do not affect the market trend. You need to see the market with along term perspective to know if it is bullish or bearish

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