102-22 Stock Trading Core Concepts

To understand the core concepts of trading in the stock market, it is important that you understand what moves the stock market and how to assess market direction.  To help us understand the feelings of the people investing in the stock market, we look at the market breadth and market sentiment.

Finally, we take a look at how many stocks you should own and how long you should hold a stock.

99 Stock Market Terms Every Good Trader & Investor Knows

Bulls & Bears

As a beginner in the world of trading, it is handy to understand some key phrases.

A bull market is a market that has its primary trend as going upward. This means, in general, the key indices are rising. Why is it called a Bull, no one really knows the true origin; however, what is important is how to remember what a bull market means.

Imagine if you will, you are being attacked by a bull, the bull would charge towards you with its head down and then attack with its horns surging upwards. This is the same as a Bull Market, attacking in a strong upward move. The same analogy applies to being Bullish on a stock, or in general, being a Bull means you are optimistic.

Bear markets are anything but restful, especially for someone invested in the stock market. A bear market means indices are in general in a downward trend.

The simplest way to remember this is to envision a bear attacking you. It would be standing on its hind legs towering above you and reaching out a clawed paw; it would take a mammoth swipe down at you.

Down is the direction of the bear, and people who have turned bearish on a stock are also holding the pessimistic view that the stock will be moving downwards in price.

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