Lesson 9 – Bulls vs Bears

When you’re watching your sports team in a game, you’re with them until the match is over. Whether good or bad, you’re sticking with that outcome. When it comes to finances though, you can always change teams and strategies and do what’s best for you.

One example is when you’re a buyer (or a bull). You don’t necessarily have to stick with a strategy that isn’t a winner. You should know when to change your tactics. If the uptrend is ending then you should use your profits to become a bear. With Forex you can be both a buyer and a seller, depending on the market. The important thing is to make a profit and thanks to the Forex market you can make money both as a buyer and as a seller. With Forex you don’t have loyalties. You just pursue your own interest, which is making a profit.

The Forex market is not actually a market, since people are not selling something, they’re just exchanging money. There are winners and then there are losers on the Forex market and the ones that manage to win in the long run are the ones that will pick the right strategies most of the time.

You can think of the buyers and sellers as the bulls and the bears. There are basically two teams and while one of them is winning, the other team is losing. You can switch teams at any time, so what you need to do is be able to read situations correctly and make decisions based on that.

While in real life you root for teams, in the Forex market you’re rooting for the money. You can consider yourself the manager and the money is your real team. You can go on the defense or you can attack and that’s a pretty good description of the bulls or bears market.

Understanding which way you should go is what the Forex trading is all about. In order to do that, you need to learn how to analyze the market and you need to get the right knowledge, which will allow you to make informed decisions.

A lot of traders that are beginners will lose money and they will think that they’re still right and that the market will eventually turn and they’ll recover. It’s important to admit that you were wrong and to learn from it. If there are doubts you shouldn’t trade, you should wait until you’re sure of the trades you’re going to make.

Another tip would be to become knowledgeable on a certain topic, so don’t spread yourself too thin. You should stick with a maximum of three currency pairs and try to understand the forces that influence their evolution. You should try to understand every single thing about the currency pairs and the relationships between the economies of the countries which use them. There are a lot of factors which can influence the evolution of a currency pair and if you want to make a nice profit in the long run you need to understand what they are and when they happen. You need to predict the evolution of those currency pairs and that’s how you make money. If you know when the market will go bulls or bears you can take the right position.

There is already a huge amount of information to learn when you’re sticking with three pairs, so it would be a huge mistake to change the currency pairs you’re trading on a regular basis.

The information you need in order to make a decision is available to everyone that trades on the Forex market, but the truth is that people will lose money even with all that information at their disposal. Some of them will not bother to look at all the information while others will make the wrong decisions by not understanding what they’re seeing.

The stats will tell you if the market is Bearish or if it’s Bullish.

Another thing to watch for is the seasonal changes. Markets will react in certain ways during certain times and you just need to know when that will happen.

To simply put it, make sure you pick the right team and you should be fine.