Bullish meaning: bullish vs bearish explained

What bullish and bearish mean

The words come from how each animal attacks. A bull thrusts its horns upwards; a bear swipes its paws downwards. So a bull is someone who expects prices to go up, and a bear is someone who expects them to go down. The terms have been used in London and New York markets for around three centuries, and they have spread into everyday speech: a manager can be "bullish about next quarter" without owning a single share.

In markets, the words do three jobs:

• A view. "I am bullish on gold" means you expect gold to rise.
• A trend. "Gold is in a bull market" describes what the price has been doing, regardless of anyone's view.
• A signal. A "bullish pattern" or "bearish divergence" is a chart feature that traders read as pointing up or down.

The people behind those views are the bulls and the bears, and "the bulls are in control" is shorthand for buyers pushing price higher.

Bull markets and bear markets

In share markets there is a common rule of thumb: a bear market is a fall of 20% or more from a recent high, and a bull market is a rise of 20% or more from a low. A smaller fall of 10% to 20% is usually called a correction. These thresholds are conventions used by financial media, not official definitions.

Currencies move in much smaller percentages, so forex traders rarely use the 20% rule. A 20% move in EUR/USD can take years. Instead they describe trends by their structure on the chart:

• Bullish structure: each high is higher than the last and each pullback stops at a higher low.
• Bearish structure: each low is lower than the last and each bounce stops at a lower high.

The turn from one to the other usually shows first as a failed new high, then a break below the last higher low. A trend that is neither is a range, which traders call neutral or sideways. More on reading this in trendlines and market structure.

Bullish and bearish in forex

A currency pair is one currency priced in another, so a forex view is always two views at once. EUR/USD shows how many dollars one euro buys. If you are bullish on EUR/USD, you expect the euro to strengthen against the dollar, which is the same as being bearish on the dollar against the euro.

This matters because a "bullish dollar" headline can mean selling some pairs and buying others, depending on which side of the pair the dollar sits. Unlike buying shares, being bearish in forex is as simple as being bullish: you sell short as easily as you buy long. Central bank tone often drives these views; see hawkish vs dovish.

Bullish candles and market sentiment

On a candlestick chart, a bullish candle is one that closed above its open, usually drawn in green or white, and a bearish candle closed below its open, usually red or black. One bearish candle in an uptrend does not make the market bearish; it is one period of selling inside a larger picture. Candle patterns such as a bullish engulfing or a bearish pin bar are read in context, at a level that matters, not on their own.

Sentiment is the crowd version of the same idea: the share of traders who are bullish or bearish at a given moment. When almost everyone is bullish, there are few buyers left to push the price higher, which is why experienced traders treat extreme sentiment with some caution rather than as a reason to join in.