What is a rally?

A rally is an upward movement in an asset’s price in a relatively short period. Rallies can take place in bullish or bearish market conditions. The opposite of rallies are crashes, which occur when prices fall quickly.

Rallies can form part of a wider upward trend or just be a temporary rise in price before heading back to pre-rally levels. There are many causes for rallies, such as technical indicators showing bullish signs giving traders confidence to buy, as well as positive news about the underlying asset, which may bring more buyers to the market.

Short term traders, or scalpers, try to enter trades before rallies happen and then sell.