What is a Bear Market?

January 7th, 2021 [eBook] Ultimate Guide to Swing Trading We just got access to a free eBook that details a proven, simple formula for swing trading successfully and wanted to pass it along... Just tap here to get your copy now If you follow our emails, you might have seen something regarding a bear market. If you're just learning how to get into trading, you might have also asked yourself what is a bear market. When you're new to trading, almost any term can seem like a big deal./p> What is a Bear Market? A Bear Market is when the market experiences a widespread decline in asset prices of at least 20% from recent highs. More simply, it refers to when market prices end lower for extended periods of time. Bear markets are often associated with declines in an overall market or index like the S&P 500. Individual securities or commodities can also be considered to be in a bear market if they experience a decline of 20%, or more, over a sustained period of time- typically two months or more. Bear markets can also happen in general economic downturns, like a recession. Phases of a Bear Market Before we dive in, let me say that the first thing you should do is not panic. If there's anything that investors should take away from 2020, it's that markets are not linear, nor do they only go up. We must remember that it's also natural for the markets to go down sometimes and there are many reasons why the markets go down. With that said, let's review 4 phases of a bear market: Stocks are usually at a high price. During this phase, investors are more likely to drop out of the market and collect their profits. As trading activity drops, stock prices begin to fall. When this happens, economic indicators tend to drop from positive to below average. Some investors begin to panic and they, too, consider selling their stocks. Speculators begin to enter the market, which raises trading volume and stock prices. Stock prices continue to slowly drop, but good news about the market starts to pour in. This starts to attract investors again and the bear markets turn into bull markets. Be sure to join us next week when we discuss what is a bull market and keep checking in for tips on navigating the financial markets! Tips4Traders For more awesome tips, news and information, visit our site...Register now This email is a paid advertisement. It is for a product or service that is not offered, recommended or endorsed by Tips4Traders.com and neither the company nor its affiliates bear responsibility or control over the content of the advertisement and the product or service offered. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Tips4Traders.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. By downloading this book your information may be shared with our educational partners. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of Tips4Traders.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

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