Four Stages Of A Bull Market

Every trader loves a bull market. Bull market has made many traders rich and happy. Some of them could become millionaires within a month. In order to optimize your profit during a bull market, you must first know four stages of a bull market run.

1. The Birth of the Bull
During this stage, the early technical signs you can see are round bottom with shallowing down penetrations and thin trading ranges. The composite index can be seen wandering aimless for a long period. The bearish news is tapering off while bullish news slowly crept in.

2. Shallow Uptrend
In this stage, you will notice the index slowly creeping up at the right side of the rounded bottom. The uptrend penetrations are very shallow and price ranges slowly get wider and wider. The shallow uptrend penetration gives indication of an impending bull run is on card. During this stage, not many traders have mixed reactions on how the market will go.

3. Breakout From Rounded Bottom
This stage is a very interesting one. You will see some small rallies and the index slowly break upward and away from the round bottom. The rally period will get longer and longer gradually. Many traders experienced good profit from trading stocks. Market sentiment is getting bullish day by day. Many traders start to feel bullish about the market.

4. Rally Begins
You will hear a lot of bullish market information. Many fundamentalists will be making many favorable market news announcements. The index will experience sharp market rallies more often and shallow dips occasionally. Some of the uptrend surges are sharp and many traders are chasing up stock prices

5. Rally Goes Full Swing
The bullish rallies go into first gear and full swing up. You see opening uptrend gaps every alternate day. . Bullish market sentiment is at its highest. Everyone on the street is talking about making money from stock market. The stock broking houses are packed with novice traders and winning stock tips are flying everywhere and every day. You see steep rallies more often. You see very few shallow market retracements.

Making money in online trading is possible but you need a well planned strategy and a trading software to start with.