“In rising financial markets, the world is forever new. The bull or optimist has no eyes for past or present, but only for the future, where streams of revenue play in his imagination” – James Buchan
We just can’t help ourselves. We open a chart, take a look at where price is now and, regardless hit that BUY button. It would seem most of us are overly optimistic when it comes to estimating the markets (and most things in life). This optimism is reflected in the trading behaviours of the majority of the crowd in Spark Profit – we tend to be bulls!
Being bullish, or bearish, are terms used to describe the actions and outlook of a trader or a market. A bull market describes a market which is rising on a wave of optimism. A bear market declines on selling pressure as people rush to the exit to offload their investments.
The glass is definitely half full with this bunch. Everything is great, the economy is improving and the only way is up! What could possible go wrong? The image of the bull comes from the way the bull attacks – a bull will thrust up with its horns in the air – this action being the metaphor for a rising market.
For a bear, the only way is down and fast. A bear’s glass is definitely half empty. Bears are no fun at parties – at least not to Bulls. The image of the bear comes from the way the bear behaves – a bear moves slowly and attacks by swiping with its paw in a downward direction.
The problem for you, as a trader, is that you want to be able to assess the markets without your own internal views skewing your trade telling you to go long when you should be short.
Whether you are a bull, or a bear, almost all traders have a natural inclination to one extreme or the other. Even some of the most experienced traders suffer from a permanent Bullish view (or an aversion to sell). Mark Weinstein said in his interview for Market Wizards that he “never went short. I felt it was un-American”. Mark went on to say “I realized that the business I was in was the height of capitalism, and it really made no difference what side of the market you were on”
So, what to do?
Flip it! That’s right, turn that chart upside down – get a new perspective. Now, before you start turning your mobile device around in what will sure to be an endless cycle of frustration – just click the new icon on the upper left corner the next time you open a chart in Spark Profit. It will flip the chart for you – giving you a new perspective to base your decisions on. How do you feel about your chosen market now? Still feeling bullish?
Regardless of whether you are a bull or a bear, don’t get into a trade until you are ready. Flip that chart and get a different perspective.
“There is only one side of the market and it is not the bull side or the bear side, but the right side” – Jesse Livermore