The main signs of bull market


Bull market refers to the securities market in which prices have a long-term upward trend. The general trend of price changes is to keep going higher, characterized by big ups and small downs. The overall trend of the bull market is upward. Although there is a decline, it always climbs higher after each decline. When more and more people continue to gather, investors have a stronger desire to push the price even higher; the number of new account openings continues to increase, and new funds continue to flow in. Investors should try to avoid frequent operations in the bull market and hold their stocks while waiting for them to rise.


Main signs of a bull market:

1. The number of stocks rising is greater than the number of stocks falling.

2. The total trading volume of the stock is high when the price is rising or low when the price is falling.

3. Securities companies lower the requirements of capital ratio of those who borrow to invest, so that they can put more capital into the market.

4. The government reduces the statutory reserve ratio of banks, luring corporate managers, directors and major shareholders to hurry to buy stocks.


Three stages :

The first stage usually occurs when the market is at its most bearish. At this time, investors were completely disillusioned with the market; the bearish sentiment in the market was high, and the value of assets was seriously undervalued.

In the second phase, while market conditions have clearly improved, the tragic decline of the bear market has left investors with lingering fears. Investors tend to hold on when prices rise to a certain level. However, the market development is still optimistic. It is often difficult for the investing public to act at this time because of the uncertainties in the market. Recently they noticed that the market was going up, but in their minds, the market had been down for a long time before and they kept thinking about the assertion that "investing in the market is risky right now". After a long period of continuous rise, the negative pessimism gradually eased.

In the third stage, sceptical experts mostly changed their minds, and more and more investors entered the market. Not every drop and correction in the market takes investors out of the market. Instead, it attracted more investors to follow. Market investment sentiment is high and investors are full of optimism. At the end of this phase, the market is highly speculative and assets are severely overvalued. When this situation reaches a certain extreme, the market will turn to collapse, and a bear market will creep in.


How us ordinary people respond when a bull market hits?

1. In a bull market, even fools can make money by buying stocks, making it difficult for people to know their true investment capabilities and leading to making investment decisions that do not match their capabilities.

2. Hold independent thinking.

3. Don't use leverage. It can both be an accelerator or a grinder for your wealth.