Understanding the Difference Dip, Correction, Dump, and Pullback

In trading and investing, you’ll often hear these terms, but they each have distinct meanings:

Dip:

A dip is a short-term drop in price during an overall uptrend. It’s usually mild and seen as a buying opportunity before the price moves higher again.

Correction:

A correction is a larger price decline, typically 10% or more from a recent high. It signals a temporary pullback in the market but not a complete trend reversal.

Dump:

A dump is a sudden and steep price drop, often driven by panic selling or negative news. It usually happens quickly and can cause significant losses in a short time.

Pullback:

A pullback is a brief pause or slight decline in price within a continuing trend. It’s less severe than a correction and can be viewed as the market catching its breath before moving on.

Knowing these terms helps you better read market moves and make smarter decisions!