What is the Bull Market? How does it happen in 4 stages?

The bull market is a name given to markets where prices of securities traded on the stock exchange are on the rise due to the good macroeconomic trend or the improvement in the situation within the company, as opposed to the bearish market in which stock prices have declined.

Although this terminology is often used for stocks, it can also be used for bonds, forex or commodity funds. Since supply-demand laws affect the market, financial markets will also increase or decrease as stock supply decreases.

Important points about the bullish trend are:

The biggest determinant of bullish trends is the self-confidence of the investors, their positive expectations and the positive outlook of the market in general.
Changes in the market during the opening phase are generally psychological and strong economic indicators and companies may not see such a large amount of earnings.
Since the outlook towards the market is positive, there will be an intense burden on buying options in derivative markets.

Bull Trend Usually occurs in 4 stages
In the first phase, the market gradually throws away the pessimism from the previous month’s trend. Prices are low and investors are very low.

In the second phase, stock prices begin to rise again, and companies’ incomes and trading activities start to increase; thus, the economy starts to climb above the average figures.

In the third phase, market indices and securities assets see new peaks. Equity trading continues to rise and yields are low, indicating that the liquidity in the market is sufficient.

Due to the high level of speculation and buying-selling activities in the last phase, public offering activities are high. The price-to-earnings ratios of the shares peaked.

Although the bullish trend includes many profit opportunities, it does not last forever and it is not possible to predict exactly when the trend will end. Investors should determine when to buy and sell and try to follow market timings.