uTrade Algos
Navigating the complexities of stock trading introduces investors to different aspects of the market, including the intriguing world of stock market animals. It’s not a zoo but rather a set of strategies employed by traders. Familiarising oneself with various share markets and terminologies is essential. While terms like bulls and bears are commonplace, there are additional animal terms in the stock market that represent specific market aspects. Decoding these animal-based slang phrases allows one to gain insights and understand their meanings.
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List of Animals of the Stock Market
The stock market animal reference teaches one about various indicators, and behaviours that are commonly used and well-known stock market jargon. With an animal reference, one can learn different things. Rabbits, sharks, and other animals can have some meaning to convey to the traders. Further, one can learn about different animals of the stock market that can help one in multiple ways.
Bull
A bull is one of the most famous and positive animals on the market. The market is in positive territory, with stock and investors placing more money into the market. If the market is bullish, investors are confident about the market, which increases the price of stocks. This can continue for many years.
In particular, the time period between 31 December 2011 and March 2015 was thought to be an upbeat time in this Indian market. The Sensex was up by over 98% this time.
Bear
The bear market happens to be exactly the opposite of a bull market. The outlook and attitude of investors towards the market are negative and pessimistic in a bear market, and this results in lower investment. The market is considered to be in a bearish mood when there is a drop of around 20%. It could last from a few days to a month. It could also happen when a country goes through a recession, which results in job losses, which, in turn, results in less investment. The Great Depression is the most well-known illustration of a bear run. The 2007 housing market crisis in the US is another example of a bearish trend.
Turtle
A turtle refers to investors in the stock market who invest for a longer period of time. as one makes the fewest number of trades and doesn’t focus on short term gains or losses.
The turtle works as the opposite of the rabbit. For example, a trader can consider investing in an IT company as the stock sees long term growth. So, after investing in the stock, one can expect the bearish trend to continue for some time. But in the long run, it can have better returns.
Rabbit
Rabbits are traders who purchase stocks and hold their positions for a short amount of time. They tend to be intraday traders who are seeking a quick return. Rabbits may not even have an overnight position and are always searching for quick cash in the daytime.
Consider, for instance, a scenario where shares of a particular company were purchased at 11:30 a.m. The decision to buy the stock was based on the anticipation of a price increase in the near future. As the stock aligned with expectations and saw an uptick around 2:30 p.m. on the same day, the decision was made to sell, realising a profit. This scenario illustrates the behaviour of a rabbit investor.
Pig
An investor is a pig who is emotional and greedy. The returns aren’t enough for them. They also ignore established investment strategies and attempt to earn a huge profit. As a result, pigs always suffer a massive loss or gain.
In a similar scenario, if a profit is made over the long term and the decision is to stay invested with the hope of maximising returns, it is categorised as a pig-investor. This approach entails the potential for significant gains but also the risk of losing all profits.
Chicken
A chicken is an investor who flies out in difficult times. They get scared even at the slightest bear tendency and make rash decisions about their investments. They are often unaware that volatility is a component of the stock market and are constantly worried about losing their money.
For example, a lot of investors sell all their stock when they see a red line on the graph. This can affect their investment and reduce the value of them.
Ostrich
Ostriches are known to possess an individual character. They are known to bury their heads in the sand when things get difficult. They do not pay attention to unpleasant situations and pray that they will disappear. Investors who behave this way are referred to as ostriches. They disregard the adverse market conditions and continue their investments in the hope of the market’s ability to eventually come back to normal in time.
Sheep
Sheep are well-known for their herd-like mentality. Investors with an identical mindset are referred to as sheep. They tend to follow an investment recommendation blindly, without putting any thought into their personal opinions. They’re usually not comfortable deciding on their own investment plans and are the last ones to follow an upward trend and abandon the downward trend.
Dog
Dogs are stocks that are less popular but are part of a larger market. They’re hammered because of their performance. Analysts and investors are expecting that they will recover.
A noteworthy illustration is found in smaller struggling IT firms. Hindered by competition and a lack of recognition, they may rebound upon identifying and rectifying their shortcomings.
Wolf
In the movie Wolf of Wall Street, American broker Jordan Belfort, who pleaded guilty to stock fraud, serves as a portrayal of how wolves operate in the investment realm. Similar to their powerful and often unscrupulous counterparts, these investors don’t hesitate to resort to scams and deceit to maximise their earnings.
Lame Duck
Lame duck refers to an investor who is not able to pay their debts for the day and is in debt. Lame duck can also describe those who have become bankrupt. The idea of margin calls originated at the beginning of the London Stock Exchange where investors could not pay the debt at the time of day. Today, a margin call could be viewed as an example of being a lazy duck.
Whale
Whales are investors, usually unidentified, who make an unusually large amount of money in the market for stocks. Whale orders can alter the direction of the stock and have an impact on market fluctuations and also. Hedge funds are often connected with whale orders.
Shark
Sharks are investors who entice consumers to invest in obscure securities that offer large returns. They manipulate the prices of stocks by trading among themselves, and when prices rise, they sell the stock to retail investors and then disappear.
Dead Cat Bounce
The dead cat bounce can be described as an uptrend that lasts only a few minutes in an investment or market that has been bearish for longer periods of time. Typically, after an upward bounce, the market is able to return to its previous downward trend.
Dogs of the Dow
The Dogs of the Dow is an investment strategy designed to beat the Dow Jones Industrial Average (DJIA) by purchasing the most dividend-paying stocks every year. The strategy was first introduced in 1991. The strategy has a history of beating the DJI index for 10 years after the finance crisis. One can get an estimate of the dividend income with just a few clicks of Share India’s dividend calculator.
Conclusion
Each animal in the stock market holds significance and conveys a unique message. Grasping the role and symbolism of these animals proves beneficial when discussing or comprehending share market concepts. These stock market animals can be employed to formulate personalised strategies, maximising returns on investments. Traders using online platforms like Share India can integrate the insights derived from understanding each animal’s significance, optimising their decision-making process and striving for maximum returns in the dynamic realm of stock trading.