In the Stock Exchange Market and the Forex market, you often hear these two words. Do you know what they mean? What do these terms “Bears have swollen the market.”, and “Bulls are compressing so much.” represent?
Generally, the bears are the ones transacting selling oriented, and the bulls are the ones transacting buying oriented. The basic principle in the process of price movement is to decrease the selling price and increase buying. This principle is valid in every field of life. If the quantity of the product is less than the demand, the price increases. Otherwise, rare jewelry and antiques would not be so expensive, right? This price balance works perfectly as a result of the open market. Every buyer who transacts to buy parity takes a step further. Likewise, every selling move drags the price down. If there is a sale, it means the product is not wanted, or they want it to be sold out. In such a case, it is rational to drag the price down.
In the Forex, sellers are named “bears” and buyers are named “bulls”.
Due to the movements of bulls’ horns being down to up, it is thought that they support the rise direction. That’s why the rising market is named as the “bull market”.
The term “bear” is thought to be chosen because bears attack downwards but that is not accurate. The Bear market term comes from the American saying; “Selling the bearskin without hunting.” Back in the day, when there were high demands for bearskin, hunters sold bearskins before hunting them and this dragged their price. Relatively, in the market, this behavior that looks like the effect of wide selling had its name because it is a fact this makes the prices decrease.