Bull vs Bear Market Explained
A bull market is a sustained rise in prices; a bear market is a sustained fall. Knowing which regime you are in changes how every setup should be traded.
The definitions
The common rule of thumb: a bull market is a rise of 20% or more from recent lows, and a bear market is a fall of 20% or more from recent highs. The numbers are conventions, not laws — what matters is a sustained, broad directional trend.
Underneath the headline number, the real tell is market structure: bull markets make higher highs and higher lows; bear markets make lower highs and lower lows. Structure flips before the 20% label does.
Why the regime matters
In a bull market, pullbacks are buying opportunities and breakouts tend to follow through; in a bear market, rallies are selling opportunities and breakdowns extend. Trading a bull-market playbook in a bear market is how traders get repeatedly stopped out.
Regimes also shift volatility and sentiment — bear markets are faster and more violent. Read the higher timeframe first to set your bias, then trade the lower timeframe in that direction.
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Play Chart Bound free → Try today's Call the Candle →Frequently asked questions
What defines a bull or bear market?
By convention, a bull market is a rise of 20% or more from a recent low and a bear market is a fall of 20% or more from a recent high — though the underlying signal is a sustained trend.
How can I tell which market I'm in?
Read market structure on the higher timeframe: higher highs and higher lows mean a bull regime; lower highs and lower lows mean a bear regime.
Why does the market regime matter for trading?
It sets your bias. In bull markets you favour buying pullbacks; in bear markets you favour selling rallies. Using the wrong playbook for the regime leads to repeated losses.