Concept of Trading Animals in Stock Market

Animals used in stock market forecasting are widely used terminologies to characterize unique features of different types of traders or investors and market scenarios. These animal references, used to describe market behavior, are well-known and commonly used in stock market terminology.  However, animal references in the stock market do not stop there. Animals ranging from rabbits to sharks are traded on the stock exchange, and each has a message to deliver.

In this investment world, almost every investor is aware of bulls and bears and the bullish and bearish phases of the stock market. Still, few are aware that the market is also affected by the existence of the animals in the share market, or at least animal terminology, on a broader scale. There are other trading animals in the share market. From pigs to sharks to ostriches, each of these phrases refers to specific market characteristics. Let’s look at all of the trading animals in the stock market and see what they imply in this post.

The Bull

The bulls are the animals used in stock market forecasting, which helps indicate investors or traders who are optimistic about the stock market’s future prospects. The bull is the most optimistic of all the stock market animals. It represents an extremely favorable and positive stock market scenario. They anticipate that the market will continue to rise. Bulls are those who raise the price of a company’s shares.

A bull is the most viable and optimistic trading animal in the stock market. Bullish indicates that the market is in a bullish state, with stock values rising and investors investing more money into the market. They believe that stable economic and social elements will help fuel consumption demand, reduce unemployment, and result in a snowball effect on the stock markets. Bullish investors are willing to go horns-up and invest more money since they are confident that share values will grow. When investors are bullish, they are optimistic about the market, which propels stock prices higher. At times, this pattern could last for years.

For example, the period from December 31, 2011, to March 31, 2015, was regarded as a positive phase for the Indian market. During this time, the Sensex increased by more than 98%.

The Bear

A Bear is one of the important trading animals in the stock market. Bears are investors or traders who are pessimistic about the stock market’s future. They are convinced that the market is about to crash. Bears are gloomy about the stock market’s future and anticipate that it will be in the red. Bears are mostly responsible for lowering share prices.

Investors’ emotions and views toward the market are pessimistic during a bear market, resulting in lower investments. When there is a 20% drop in the market, the market is termed to be bearish. This could last several months. This period may also occur when a country is experiencing economic turbulence, which leads to job losses and, as a result, lower investment. The most well-known example of a bear market is the Great Depression. Another example of a bearish run is the 2007 housing crisis.

The Rabbit

The phrase “rabbits” refers to traders or investors who take positions for a very short period of time. Rabbits are those trading animals in stock market scalpers who strive to make money during the day. They do not desire overnight (or long-term) risk and are only interested in making a quick profit in the market during the day.

These traders are those that acquire stocks and hold them for a relatively short length of time. They are typically intraday traders seeking a quick profit. Rabbits may not even be able to hold a stock overnight, and they are constantly on the lookout for fast bucks during the day. Consider the following scenario: you purchased stock in a specific company at 11:30 a.m. You purchased this stock because you believe it would rise in value over time. The stock soared as projected, and you sold it for a profit at about 2.30 p.m. the same day. This is a perfect depiction of a rabbit investor.

The Turtle

Turtles are the complete opposite of Rabbits. Turtles are often long-term investors who are reluctant to buy, slow to sell, and trade for the long run. Turtles are those trading animals in the stock market that look at the long term and strive to make the fewest number of trades possible. This type of investor is less concerned with short-term swings and more focused on long-term gains.

Assume you purchased a stock in an IT business expecting long-term growth. The stock dropped immediately after you purchased it. It remained in a bearish trend for some time, but you believed in the company’s future and stayed invested for a longer period of time. A turtle investor approaches the stock market in this manner.

The Pig

Pigs are the least interested trading animals in the stock market. These investors or traders are impatient, risk-taking, greedy, and emotional. The Pigs don’t perform any analysis and are always looking for hot ideas to make some quick money in the stock market. Returns are never enough for them, and they neglect proven investment theories in order to always earn a lot of money. Pigs are the worst performers in the stock market. As a result, pigs always wind up with a great loss or a huge profit.
rnLet’s take an example that you have made a profit in the long run, but you have opted to stay involved for a longer period of time with the aim of making even more profit. This will turn you become a pig investor. Here, you can either win big or lose all of your money.

The Ostrich

Ostrich is the most afraid trading animal in the stock market. Ostrich investors are people who hide their heads in the sand during terrible markets, expecting that their portfolios will not suffer significantly.

These investors avoid negative news hoping that it will go away and have no effect on their investments. Ostrich investors believe that if they don’t know how their portfolio is doing, it will survive and prosper.

Ostriches Investors are said to have a distinct personality. They overlook the adverse market conditions and continue to invest in hopes that the market will return to normalcy organically over time.

Even if the person believes a company has a long-term promise, you must account for changes in market conditions while making an investment choice. Consider staying invested in a company for a long period because you see its growth potential. However, everything has changed, especially market conditions, and the potential now appears gloomy. You are an ostrich investor if you opt to stay invested despite the hurdles.

The Chicken

Chicken investors are those who are afraid of the stock market and so do not take chances. These investors chicken out during tough times. They avoid market risks by investing in conservative products such as bonds, bank deposits, and government securities. Chicken are those trading animals in the stock market that panic even when there is a minor bearish trend and make rash investing judgments. They frequently forget that volatility is a part of the stock market and live in continual fear of losing money.

For example, many investors sell all of their equities the moment the graph turns red. This will have an impact on their investments and limit the potential of the investments they have.

Conclusion

Every animal in the share market has a reference used in trade and has its meaning. Understanding this terminology is essential for grasping critical information regarding financial markets regularly. Some of these applications serve as a strategy, while others serve as a warning. To get the most out of your investment, it is best to understand the complexities of stock markets before you begin investing.

Every stock market animal has a distinct investing strategy. Some begin as sheep or chickens and progress to become bulls. A bull near retirement may turn into a chicken and resort to debt investments, and so on. It is entirely up to the investor to select what kind of stock market animal they want to be.