Why are animals in trading and why are they used?

Trading Animals

Those who are entering the world of trading have surely experienced a very particular case and it is about animals in trading. 

It is a metaphorical theme in the investment environment, where the personality of an animal can be coined to the different actors that are in this fascinating financial market. 

Thus, different terminologies associated with the animal world have emerged, such as  Bears, Bulls and Whales

In Money Investors we have decided to talk about this type of terminology, so that you understand why these animals are used in  trading  and what is their meaning.

Why are animals used in trading? 

It is a more analogical subject where a comparison is made or the behavior of certain types of animals in the financial market is similar

Taking into account, that it manages to characterize the different animals with the ability to exchange or trade cryptocurrencies. 

This classification also depends on the different periods that are taken into account by  traders  at the time of trading, we will tell you what they are about: 

  1. Accumulation: It occurs when the price of an asset falls to a minimum point and there is a general sentiment, with a downward trend.
  1. Bullish Period: The value of the asset presents a correction and becomes stronger, achieving a bullish sentiment in the market.
  1. Distribution: Here in this period, the price of the asset presents its maximum point or resistance and has very little probability of presenting a further rise. 
  1. Bearish Period: It is at its highest point, experiences a correction and now begins a decline.  

What do the animals in the Trading? 

Each animal represents a particular personality in this complex but interesting world of  Trading . We are going to talk about the characteristics and association that Bears, Bulls and Whales have.  

Bears 

For this first case of the bear, it is associated with the term bearish,  since it is a noble and conservative animal during winter. Which usually represents the harshest climatic weather, a time where the cold is constant and food shortages are quite common. 

Despite the inclement weather and how harsh and temporary it may be, but ultimately impossible to avoid, the bear is very well adapted.

In the cryptocurrency environment, the winter season is classified as the time of low prices, where there is a weak market, which tries to stand out from those dangerous falls, which mean considerable losses. 

In the bear market, bears are associated with those sellers who bet on the bearish streak until their energy and persistence is exhausted. 

In this way, investors distrust or a general fear arises, caused by some external event such as regulations, hacks, sanctions, among others.

This is how you will normally find that the term of falling or falling prices of an asset in general is associated with the behavior and actions of bears on the market, which usually present actions induced by some external event.

Bulls 

Bears are exhausted and manage to overcome their greatest fears, now the market is struggling to reactivate itself and in that struggle another type of animal enters the scene, which are bulls.

The metaphor around the bull with the market bulls corresponds to its energetic character, which represents the power and confidence that this animal brings

Many experts compare the ergonomic figure of the bull to the bull market by the shape of its body, angled upward, with its head raised above the neck.

There is a constant struggle between bulls and bears to have control of the market and when they do, because they enter low prices, they maintain enough force to tangibly boost the prices of any asset.

Whales  

Another term that has been coined in the world of trading is the whale. Which refers to those movements of great importance that are carried out by purses in particular. 

Which may belong to an exchange, some personality or a particular institution that has the ability to move large sums of money in the cryptocurrency environment.

The metaphor around the term and the crypto space has been used from a simple but quite reasonable representation, which is the following: 

“We are all investors in an ecosystem that in turn acts like a great ocean, where there are fish (all users who have crypto) and whales (large investors), the latter are those who feed on the positions of those who are they consider weaker”.

The heaviest investors in the crypto environment are normally referred to under the term whales. 

Taking into account, that the so-called BTC whales are the ones who carry out the largest movements, such as hedge funds and investment funds in Bitcoin

In this trading environment there are a large number of prominent characters that are coined under this term, with different pseudonyms with which they operate, many try to maintain an unknown identity.

Whales often cause a CRUSHING impact. They are able to manipulate the market to obtain an increase in their profits in both directions, that is, both towards the fall or the rise of the price of a particular asset.

Conclusion of animals in trading  

The importance of these terms that associate different animals in trading goes beyond identifying their actions, it is necessary to understand and understand their key position in the market.

That is why many investors closely follow the actions of whales in the market in general, taking into account that with this type of monitoring they can come to understand the effects they can have on the market, with the position they have in the actuality. 

As you can see, it is very relevant to know what a particular bear market or bull market means. And how it could be beneficial or detrimental to an average investor.

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