Attendance at stock exchanges different animals becomes a complete surprise for beginning traders. Nevertheless, this is not a delusion or an illusion. Bulls, bears, sheep and other representatives of the fauna on the market act as prototypes. In other words, each market participant can be represented by one or another animal.
About bulls and bears, probably even novices heard. It is no accident that a monument to these two animals is set up opposite the office of the Frankfurt Stock Exchange. These statues are a symbol of the constant struggle between the descending and ascending trend. About the other participants of the stock zoo is much less known, and today I would like to talk about them.
Bears and bulls: who it is
Let's start with the most famous animals. This is the name of top players who adhere to different strategies. If bulls usually earn on the growth of quotations, then the bears play on a slide.
There are several versions of the appearance of such funny names. According to the most common, they arose in the XNUMXth century, with the beginning of the formation of the market. It was at this time that the Scottish satirist Arbuthnot published comic pamphlets. Their main character was John Bull (from the English Bull - bull) - a collective image of an Englishman with a bull's head. Another hero was The Bear, who constantly made fun of Bulle. In one of the episodes, the action takes place on the London Stock Exchange, where a confrontation arose between opponents. In the future, a version, supported by economic textbooks, appeared that bulls play to increase quotations, and bears receive income from their decline.
The logic here is simple and understandable, because a bull always attacks its horns upwards. The bear, on the contrary, presses on its prey from above, pressing it to the ground. Here you can see an analogy with market participants: some are ready to raise prices to the skies, others are trying to reduce them as much as possible. So bears and bulls are traders, working on different strategies.
More about bulls
On the stock exchanges, bull investors buy up assets in the hope of their growth. This category of traders tries to buy securities cheaper and sell more expensive, and what it earns. Due to high profitability of investments and high turnover on the price difference, one can earn decent money.
In trading, even there is the concept of a "bull market". This means the moment when asset prices start to grow, like the basic currency of operations, and the cost of quoted currencies is reduced. It can not be said that such a situation, arising periodically in the market, is positive. What brings profit to one trader, inevitably turns into losses for another.
There is also such a thing as a "long bullish position". Its essence is that players buy up undervalued trading assets, staking on their growth in the future. If the calculation is justified, the purchased shares will be resold with a decent profit.
What role do the bears play?
Bears on stock exchanges work differently. They sell securities, hoping that in the future the quotes will go down. Thus, bears are the exact opposite of bulls and earn on what is not yet. Their work is based on selling assets as high as possible, waiting until the share price has fallen to a minimum, and starting to buy them again.
Let's see how it looks in practice. Suppose a trader purchased 10 shares of the company on bail or in debt. Then he immediately got rid of them, selling each share for 150 rubles. The exchange account will be replenished by one and a half thousand, and when the securities begin to become cheaper, the bear will buy them again for 140 rubles. Thus, the market participant will earn 100 rubles and return the assets to the owner with a commission, for example, in rubles per piece. The net profit of the player-bear will be 90 rubles.
Based on the strategy traded by bears, the concept of "short bearish position" appeared on the market. "Short position" - this is a downgrade game, when the asset is sold, and then redeemed back at a more modest price.
Of course, the bear does not work at random, its activity is based on forecasts. The value of assets is influenced by publications in the press, negative financial statements of firms and other factors.
Other members of the bestial team
As key players of the stock market received the names of animals, you can go further. Over time, the names of animals began to be called and other traders. Classification depends on the behavior of people in the market, because everyone trades in completely different ways.
The names of fauna representatives are based primarily on the results and level of trade. For example, wolves are called traders, who in most cases manage to make a profit. Los is a coveted prey for hunter trader.
The elk often closes deals in negative, that is, bear losses. There are lemmings, which in their work are guided by experienced players. In addition, there are several more bright characters, represented in the form of animals.
Hare - a smart animal, which is reflected in his behavior in the stock market. Long ears always play on fluctuations in rates and their instability. They often feel insecure, a sharp change in course frightens them, causes panic and forces them to sell assets.
Hare position in the market is not the most successful. The impatience of eared players can turn into big losses. Nevertheless, such traders close a large number of transactions in one trading session.
If we try to build a chain of associations, the word "fear" comes to mind immediately. Indeed, the sheep in the stock market is the most cautious player. Such traders are many and often engaged in analysis, forecasting and always double-check the data.
True, it happens that a sheep tries to put on a bear or bullish hide and appear as a professional trader. But if something starts to go wrong, the market participant immediately loses confidence. Doubts begin to torment him, and from beneath the hide of a terrible animal a plaintive bleating is heard. It is no accident that when stock sheep suffer losses, experienced speculators say: "Shave the sheep."
Pigs are often called market participants who can not stop in time and pick up their own. They tend to hold positions for a long time, not paying attention to how the situation develops on the stock exchange. Such an animal can confidently move against the trend, despite the behavior of other animals.
Pigs are most focused on the result and making a profit. The amount of investments and the quality of the shares they acquire are not particularly worrisome. Such irresponsibility often leads to losses, although players of this category usually invest large amounts of money in an asset.
On the stock exchange crypto-currency it is often possible to meet such an animal as a hamster. This is the name of beginners who are prone to panic. Hamsters are inclined to trust rumors that are deliberately dismissed, and to buy or sell assets at an unsuitable moment.
It looks like this. Experienced players-pampers begin to sharply raise the rate, making large infusions, and for a short time pumped up the market. When the course is at the highest level and artificially maintained, hamsters are taken for the job. They actively buy up the crypto currency at a high price, sometimes investing all the funds. After this comes a dump - a sharp drop in the rate, caused by the massive sale of pampered assets previously purchased.
In order not to get the role of a hamster on the stock exchange, one must adhere to certain rules:
- Do not trade the crypt when the price goes down more than 15%. There is a high probability that soon the price will start to rise again.
- Do not acquire crypt on the second pampa, when the growth rate exceeded 20%.
- Do not engage in trade "by eye" and do not particularly trust the predictions of the forums. As a rule, their analysts pursue a certain goal - to introduce newcomers to confusion. Often they get it.
- Be ready to sell assets in yourself at a loss so that after a dump buy them at a reduced price.
Even if the price seems very seductive, do not buy all the money. Intuition in the process of trading, of course, is important, but no less important role is played by cold calculation.
Today we reviewed all the main types of players, learned a little about their behavior and ways of working in the market.
Obviously, the most successful traders are bears and bulls, they should be oriented on them. Hare because of fussiness often bear losses, pigs can drain the deposit because of greed. Sheep do not tolerate the slightest market fluctuations, and hamsters have the ability to buy and sell assets at the most inopportune moment.
In fact, any trader, both experienced and novice, has his own unique style of trading. To occupy a worthy place in the market, you need to learn the basics of investing, gaining experience, learning to apply knowledge in practice.
Of course, not everyone can quickly understand the intricacies of a complex financial system. But luck loves stubborn, so do not doubt: in time you will succeed.