Bullish definition

What does it mean to be bullish in trading?

Bullish traders believe, based on their analysis, that a market will experience an upward price movement. Being bullish involves buying an underlying market – known as going long – in order to profit by selling the market in the future, once the price has risen.

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Famous bullish traders

There are many famous bullish traders who have earned large profits from speculating on markets rising:

  • Jim Rogers made his fortune with the Quantum Fund, which he co-founded with a famous bearish trader – George Soros. Rogers contributed to the growth of the fund by being bullish on commodities throughout the 1980s and 1990s
  • David Tepper bought large quantities of undervalued American bank stocks in the fallout of the 2008 financial crisis, and cashed in when their price increased after a government bank bailout
  • Ed Seykota is a famous trend trader who turned $5000 into $15 million over 12 years by following both bullish and bearish trends
  • Richard Dennis is another trend trader, who turned $1600 into $200 million in just ten years. He did so by being bullish during uptrends and following the trend until its completion

How to take a bullish position

To take a bullish position, you would buy the market. You can do this either by investing in the underlying market, or by trading on its price. Most investors will be bullish by default, because by investing in shares (or other assets) they own the asset outright and so rely on the market rising to realise a profit.

However, traders can also speculate that a market will increase in value with financial derivatives such as CFDs and spread bets. These products can be used to trade on the price movements of an asset without taking ownership of it, meaning they can also be used to take a bearish position.

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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.