Everyone assumes they know what a Bull Market is. However, when searching for a clear definition, this is the sort of confusing jargon you'll usually find . . .

"A prolonged period in which investment prices rise faster than their historical average." - Investorwords.com

"An extended period of generally rising prices . . ." - Wall Street Words.

"When stock prices have risen steadily over several months, experts call it a "bull" market." - MSN Money

Notice the vague terms - like "extended" or "prolonged" period and "generally rising prices." The same type expressions are used to define Bear markets as well.

In order to make money in any market you have to first decide what the terms Bull and Bear actually mean.

-- Vague Vs. Specific - The Only Market That Matters

Bull and Bear markets are relative terms. To have any positive value they must apply specifically to YOUR situation.

The massive US stock market is made up of an almost unlimited number of smaller markets. All of the different sectors, industries, and other groupings represent potential Bull or Bear markets. Even an individual stock can represent a unique Bull or Bear market - all by itself.

The only market that matters is the one that directly affects you. In order to determine which one that is, we need simple yet workable definitions:

Before we look at how to apply these definitions, be aware that the trend is important because it reveals continuous price movement in the direction in which you wish to trade. This allows you to intentionally take positions in harmony WITH the trend instead of against it.

Time frame is equally important because it exposes the price trend that fits YOUR chosen style and method of trading. For example, a trend in a monthly time frame lasting a period of years has little effect if you only hold a position for a few days or weeks.

You can call any uptrend a "Bull" or any downtrend a "Bear" - so long as you know specifically which trend is taking place in YOUR stock and YOUR time frame.

To further understand what "trends" and "time frames" mean in usable terms, let's take a brief journey into the past . . .

-- "Dow's Three Trends"

Charles Dow - who introduced the first Dow Jones Average in 1896 - taught that there are always three "trends" occurring in the stock market.

~ The first trend is what he called the Primary Trend, which can be either Bullish or Bearish. These are trends lasting anywhere from a year up to several years, and can sometimes run for much longer.

~ The next trend is Dow's Secondary Trend. These "counter trends" move in a direction opposite that of the Primary Trend. Counter trends usually last anywhere from a week to a few months.

~ The third trend Dow called the Minor Trend. He referred to these very short-term intra and inter-day trends as "Tertiary Movements."

Notice that the only real difference between the three Dow trends is the time frame. Also, note that when most people speak of a "Bull" or "Bear" market, they unknowingly are referring to Dow's Primary trend.

Although Dow's work focused primarily on the US stock market as a whole, you can find these same three trends at work in individual stocks as well. Interestingly, you can also find stocks exhibiting each of Dow's Three Trends simultaneously - both up and down.

-Which Trend Is YOUR Friend?

There are an unlimited number of "Bull" and "Bear" markets - all going on simultaneously in different time frames. However, the only market that matters is the market that directly affects your profitability. You want to be sure your stock positions always line up with the right trend.

Dow's insights allow you to define Bulls and Bears in productive ways. By defining three basic trends, Dow opened the door to understanding the important relationship between trend and time frame.

"To be of any value, a trend must be connected to a time frame"

-- How To Take Advantage Of Price Moves In Either Direction.

All price movement offers opportunity to make money - regardless of the direction. Since the markets spend a great deal of time going down as well as up, it's important to know how to take advantage of these periods of decline.

Here are two trading terms that everyone should be familiar with - "Long" and "Short." Long basically means Buy, and Short means Sell Short. "Long" means you make money when stocks go up, "Short" means you make money when stocks go down.

Long – The typical investor is "Long." "Going Long" is just another way of saying you are buying a stock. In other words, a "Long" is the same a "buy."

It's also called "entering a Long position." A Long Position is when stocks are owned by an investor and are held in a brokerage account.

Short - "Going Short" or entering a "Short" position is a legal way to make money when stock prices go down. It's also called "shorting."

Shorting takes place when you borrow stock from your broker – stock that you do not own - then you "sell" it.

You are betting that the price will drop, so that you can buy the stock back at a lower price than you sold it, and then return the borrowed shares to your broker. If the price does go down as planned, you pocket the difference as your profit.

Less than 2% of the public knows what "shorting" is, and even fewer know how it's done. Most investors never Short a stock, even though the markets spend a great deal of time going down as well as up.

Shorting really isn't that hard, nor is it any riskier than other typical investor strategies. Since the market goes down a large percentage of the time, anyone seriously interested in trading should consider learning how to sell Short.

--The Long and Short Of It . . .

Bulls and Bears exist within all market time frames. You can put these trends to work on your behalf. Don't worry if the details seem a bit complicated at first. It gets easier as you become familiar with this new information.

More than 80% of all individuals lose money in the stock market. This isn't because they lack intelligence. They just aren't aware of what is truly important.

Timing entries into trends requires a certain amount of skill. RightLine make it easy for you by providing specific buy & sell information in each of our Reports.

• The RightLine Report for Active Traders focuses on short-term stock plays lasting from a few hours to several days. Each issue of The RightLine Report includes both Long and Short setups to help you make money when stocks go up or down.