All right, we have gone trough the necessary basics of charts and trends. Now it is time to step up the pace and start learning how to spot where profits are being made.

There are two main types of analysis that traders use to read the market and develop trading strategies. Before we discuss these two strategies, you should know that traders often describe the market as ‘Bullish’ or ‘Bearish’. It’s very easy to understand.

A bullish or bull market describes a rising market that shows confidence and stability. Typically the economy is strong, convincing brokers and investors of an upward market trend. On the other side of the spectrum is a bearish market or a bear market. This declining market creates insecurity among brokers and investors who expect trends to go downward.